The business community will welcome today’s Budget announcements with the continuing theme of growth, consistency and stability.
Here’s our Budget 2015 summary for business outlining the key announcements:
Corporation Tax
- for small businesses, the rate of Corporation Tax remains at 20%.
- the main rate will be cut to 20% from April 2015. The rules will be amended to prevent contrived loss arrangements.
Investment in Plant and Machinery
- The £500,000 Capital Allowances Annual Investment Allowance (AIA) to be reduced on 31 December 2015.
- The new figure to be announced at a later date and is expected to be more generous than the previously announced £25,000.
Savings for Employers
- NICs for under-21s will be abolished from April 2015. They will also be abolished for young apprentices from April 2016.
- The Employment Allowance of £2,000 per year will continue for businesses in 2015/2016. No employer NICs will be paid until the business has exceeded the £2,000 allowance.
Business Rates
- a “major” review of business rates was announced. Small business rates relief will be extended to March 2016.
- Properties with a rateable value of less than £6,000 will receive 100% relief.
- Properties with a rateable value of between £6,000 and £12,000 will receive relief on a reducing scale from 100% to 0%.
Exemption for Trivial Benefits in Kind
- An exemption will be introduced for qualifying trivial benefits in kind which cost £50 or less. The exemption will be capped at £300 for directors of owner managed businesses.
Self Employed National Insurance Contributions (NIC)
- Plans were announced to scrap the flat-rate Class 2 NICs (£2.80 per week) which are payable by the self employed. The Government will consult on this during 2015.
VAT
- The VAT registration threshold will increase by £1,000 to £82,000 with effect from April 2015.
- The VAT deregistration threshold will increase from £79,000 to £80,000 with effect from April 2015.
Tax Returns
- the Self-Assessment Tax Return as we know it will be abolished, affecting 12 million people and small businesses. In most cases, the information HMRC needs will be uploaded automatically into new digital tax accounts.
Travel and Subsistence
- a clampdown on umbrella companies and agencies that abuse tax relief on travel and subsistence.
Diverted Profits Tax
- a tax aimed at large companies that artificially shift profits offshore will come into effect from April 2015.
Entrepreneurs’ Relief
- loopholes will be closed to make the relief only available to those selling genuine stakes in businesses.
Bank Levy
- the annual bank levy will be raised to 0.21%.
Farmers
Farmers will be able to average their income over 5 years for tax purposes as opposed to only two.
Contact us to discuss how the Budget 2015 announcements may affect your business on 01228 492 729.
