George Osborne today outlined plans to “fuel the tank of the British economy” as he announced a raft of measures to help families and boost business.
Some promises for small business owners:-
- No new regulation on firms with fewer than 10 staff for three years! Believe that one?
- Scrapping legislation that would have given staff of companies employing less than 250 people the statutory right to request time off to study or train. Although they might not know it, employees at larger companies already have that right.
- Business rate relief holiday for small firms extended for another year
- New rules to require planners to prioritise growth and jobs
- The mileage rate increases to 45p per mile for the first 10,000 miles from today. This is the amount that can be claimed ‘tax free’ for use of a car on business purposes.
- Small companies’ research and development tax credit rises to 200pc in April and 225pc in 2012
Mr Osborne announced plans to introduce enterprise zones, in cities including Manchester and Liverpool, cut corporation tax and slash £350 m of red tape in a Budget which he said would help make Britain the “best place in Europe to start, grow and finance a business”.
In what Mr Osborne described as an “historic step”, consultations are to begin on merging national insurance and income tax.
WARNING whilst it might be logical, this is likely to be very bad news for small business owners. The self employed pay a lower rate of National Insurance than those in employment and people running their own limited company can avoid national insurance all together by paying dividends. If the tax rate is increased to include what was national insurance, then business owners are very likely to end up paying more!!!!!!
The full rate of corporation tax is to be reduced by 2% from April 1 and by 1% in each of the following three years. It will then be just 23% not much different to the rate for Small Companies. The government had previously announced that the corporation tax rate for small companies would fall from 21% to 20% in early April.
Mr Osborne announced an increase in the income tax threshold to £8,105 from April 2012. Fuel duty will be cut by 1p per litre from 6pm tonight.
A total of 21 enterprise zones, targeted at areas where the economy has struggled and offering tax breaks and discounts on rates, are to be introduced.
Other highlights included an £200m extra to be invested in regional railways – including schemes in Manchester, which Mr Osborne said would speed up journeys between Leeds and Manchester. There is a plan for a rail link between Piccadilly and Victoria stations.
Also 40,000 new apprenticeships for young unemployed people; and an extra £2bn being provided for the Government’s Green Investment Banks, which will be introduced a year earlier than planned in 2012.
Mr Osborne described the existing 50% top tax rate as a “temporary measure” but said it was not the “right time to remove it”.
The inheritance tax (IHT) rate will be slashed by 10% for wealthy individuals who leave at least a tenth of their estate to good causes as part of a new drive to boost legacy giving to charities and the arts. Osborne told the Commons: “If you leave 10% or more of your estate to charity, then the government will take 10% off your IHT rate. Let’s be clear: no beneficiaries will be better off, just the charities to the tune of £300m. I want to make giving 10% of your legacy to charity the new norm in our country.”
He described small businesses as the “innocent victims of the credit crunch” and announced plans to introduce export credits to help SMEs, and £100m for new science facilities.
He doubled the size of entrepreneurs relief to £10m (All chancellors love to double at least one tax relief in any budget) .
Income Tax relief on Enterprise Investment Scheme increases from 20pc to 30pc next month
Mr Osborne pledged £250m to help 10,000 first-time homebuyers purchase newly built flats and houses in England and increased the charge on ‘non-doms’ to £50,000 for those who have been in this country for more than 12 years.