From a Lewis Smith & Co perspective this has been a very typical pre-election budget. Lots of fine words from the Chancellor but not too much content.
There have been some changes that are going to help small businesses around the Black Country but the planned increase in National Insurance contributions is still going ahead, which will offset any positive moves for most of us. Let’s take a look at the budget announcements that may matter most to you.
- The Annual Investment Allowance for plant purchases (which allows you to write off 100 per cent of qualifying expenditure against your company’s taxable profits) has been increased from £50k to £100k. This may help you to bring forward investment decisions for plant and machinery.
- There will be cut in business rates of around 7p in the pound for small businesses from October this year for 12 months. If you have previously paid rates of up to £6,000 then you won’t be liable for business rates for a year from October.
- The Chancellor has called for RBS and Lloyds to provide £94bn in new business loans, nearly half to small and medium-sized businesses over next year. A credit adjudicator has been established to put pressure on the banks to lend by reviewing loan requests to see if they have been unfairly rejected. Let’s hope that it does create a little more urgency in issuing finance.
- The threshold for stamp duty for first time house buyers is increasing to £250k for 2 years, which could help to stimulate the housing market. However the rate is raising to 5% for properties selling for greater than £1m from April 2011.
- Annual limits on Individual Savings Accounts (ISAs) will rise from £7,200 to £10,200 next month.
- Inheritance tax threshold frozen for four years and no further changes to VAT or income tax are planned. What the planning period is we don’t know.
That’s this year’s budget dealt with. But do you remember that there were changes announced in the last budget which will be coming into effect this year? The Government is probably counting on the fact that had forgotten them.
- There will be a higher rate of Income tax for those earning more than £150,000 – a rise to 50% from April 2010
- Tax relief on pensions to be reduced for people on more than £150,000 a year from April 2011 – People earning up to £150,000 will get 40% tax relief, with the relief tapering down to 20% for those with a taxable income of £180,000.
If you want to understand more about the impact of the budget on your business then feel free to give us a call on 01384 235549 to discuss your issues.
Lewis Smith & Co. – Supporting business in Stourbridge, Kingswinford and the Black Country
