SMEs up and down the country watched with baited breath on 8th July to see what business-boosting measures the chancellor had in his ‘red box’. With George Osborne at the speaker’s box for more than 75 minutes delivering the first Conservative Budget since 1996, we’ve condensed his near 10,000-word speech into a handy summary.
Annual Investment Allowance (AIA)
Having fluctuated four times since 2008, the AIA threshold will be set at £200,000. Rather than reverting to £25,000, this substantially higher figure will ensure continued investment, particularly in manufacturing and agriculture. AIA has fast become a major incentive, encouraging firms to utilise asset finance to purchase new equipment and take advantage of the 100 per cent tax relief.
Corporation Tax cuts
The Conservative Party has already overseen a Corporation Tax cut from 28 per cent to 20 per cent and the chancellor went one step further. The threshold will be lowered to 19 per cent in 2017 and 18 per cent in 2020 – a move that should benefit more than one million businesses.
To meet a quota of three million new Apprenticeships by 2020, the government has introduced a levy on large businesses. It is hoped that this will improve employer training and boost take up of young learners.
National wage hike
As of April 2016, the minimum wage for those aged over 25 will stand at £7.20. With the Low Pay Commission then able to have its say on future increases, the government has set an ambitious target of £9 by 2020.
The chancellor surprised motorists by overhauling the taxation system for the first time since 2005. From 2017, all new cars will be taxed within one of three new Vehicle Exercise Duty (VED) bands – zero, standard and premium. The amount will depend on the car’s CO2 emissions and list price, with revenues paying for the sustained investment in the UK road network.
Extended Sunday trading
In the biggest shakeup of trading laws since the early 90s, large retailers will now be able to open an additional two hours on Sunday. Having initially trialled the changes during the 2012 Olympics, research suggests that Sunday shopping habits are becoming more popular than Saturday. The government will now consult on devolving these powers to elected mayors and local authorities.