How is the budget going to affect you? Are you a small business owner? Are you an Employee? Read here to see how the budget will impact on your life. This afternoon George Osbourne the Chancellor announced the budget that will impact small business owners and employees alike for the next year. Below are just some of the decisions that have been made.
For those of our Clients who work, the tax-free personal income allowance is being raised to £11,500 in 2017. The government have stated that they plan to increase this to £12,500 by 2020. This will reportedly give approximately 31 million people a tax cut. The rate at which workers start 40% income tax is to be raised from £42,385 to £45,000 from April next year.
For those of our Clients who are business owners, there will be reforms to business rates which will mean 600,000 small businesses will pay no rates from April next year and 250,000 will have their rates cuts from April 2017. It has also been announced that a new threshold for small business rate relief is to increase from £6,000 to £15,000. Further, cooperation tax is to be reduced to 17% by April 2020. A further announcement was made regarding commercial stamp duty. This reform will benefit small firms with approximately 90% of small firms paying less stamp duty or being unaffected, however 9% of firms will pay more. The commercial stamp duty will be set at 0% on purchases up to £150,000, 2% on next the £100,000 and 5% top rate above £250,000. This will be effective from midnight tonight.
For our Clients who are saving, the yearly annual ISA limit is to increase next year from around £15,000 to £20,000. It has also been announced that anyone under the age of forty will be able to open a lifetime ISA. For every £4 you save, the government will give you £1 until you are fifty. The money can be used to save for a pension, or for a home. If you have already starting saving in a help-to-buy ISA, you will be able transfer this ISA into this schemes.
Fuel duty has been frozen for the sixth year in a row. This reportedly saves the average driver £75.00 per year.
Turning to food and drink, a sugar tax is to be introduced to the drinks industry from 2018. This will be a tax on the manufacturing companies, but no doubt this tax will be passed on to the consumers by increasing the prices. The money is to be used to spend on sports in schools, schools will be able to apply for money to extend the school day and fund more sports activities.
If you seek business advice or assistance from start-ups to taking on employees, dealing with disputes or collection of debt then contact Salena Dawson @dawsonslaw