Derry Crowley, CEO of Xeinadin (a top 20 accountancy firm) picks out the main implications the Spring Budget will have on small businesses saying:
Yesterday’s Spring Budget was an important one for the Chancellor, given it has the potential to be the last financial milestone in 14 years of Conservative government.
Delivered in part as a congratulatory pat on the back for the government ahead of the upcoming election, the focus was as much on historic successes – including improved long-term growth figures, and reduction in inflation – as newly introduced changes. And thankfully, as part of these measures Hunt went further than in the Autumn in his support for small businesses – the backbone of our economy.
The extension of the recovery loan scheme to provide a further £200m directly targeted towards small businesses, will provide a welcome source of finance for smaller businesses. Additional support for hospitality, and pubs in particular, was sorely needed and should provide some relief for those operating in this sector; owners and landlords have had little financial relief in recent years with campaigns to get SMEs back on their feet being limited in scope. Additionally, the increase in the VAT registration threshold – from £85,000 to £90,000 – is a welcome measure to help ease distortion, though we hoped Hunt to have been more adventurous with this.
We welcome the creation of a “British” ISA – with an extra £5,000 tax-free allowance – to encourage greater investment from the public. It is a positive move to encourage more investment in the UK economy, however the likelihood is most of this will be directed towards larger businesses. And the 2% reduction in national insurance, and changes to the high income child benefit charge, will ultimately mean more money in the back pocket of all British workers.
Of course, not everyone will benefit from the Budget. In particular, property investors, particularly those owning holiday lets, and non-domiciles, may see their taxes increase markedly. But overall, we consider the Budget to be bold and generally positive for small businesses.
