Budget 2015: What does it mean for you?

It was a mixed bag for business owners as Chancellor George Osborne delivered the first Conservative Budget of the new government.

National Insurance employment allowance for small firms is to be increased by 50% to 3,000 from 2016, but the Living Wage is to hit 9 by 2020 for those aged 25 and over. The National Living Wage will be increased to 7.20 in April 2016, with the Low Pay Commission urged to recommend the premium rate going forward.

This decision was labelled as challenging by John Allan, national chairman of the Federation of Small Businesses. He said: Even though offset by a welcome increase in the employment allowance, some will find the new National Living Wage challenging.

Paul Kenny, GMB General Secretary, said the Living Wage pledge, coupled with a cut in tax credits was"a beautifully crafted con trick by Osborne".

"On the one hand he offers a vision of a living wage which is welcome. He confirms what GMB has being saying for some time the vast majority of employers can afford pay rises and no amount of howling from CBI will alter that fact. On the other hand he is taking away money from working families without any guarantee that they will be better off.

A new apprenticeship levy for large employers is also set to be introduced, while the Annual Investment Allowance for SMEs will be set at 200,000 as a major and permanent change to incentivise investment. The allowance currently stands at 100,000, but the Chancellor said the figure could have been slashed to 25,000 by the end of the year without action.

Ian Wright, director general of the Food and Drink Federation, cautiously welcomed today's budget.

The Chancellors investment in British business through the cut in corporation tax, a doubling in the Annual Investment Allowance and cuts in employer National Insurance contributions will be welcomed by food and drink manufacturers of all sizes.

Our sector is facing significant skills shortages, particularly in engineering and technical roles and the apprenticeship route is a hugely important way to build our talent pipeline. We will be seeking further clarity on the detail of the apprenticeship levy as it is not clear how this will deliver the highly skilled professionals we need and meet the needs of both employers and workforce."

Simon Walker, director general of the Institute of Directors, said AIA announcement was not nearly good enough. The Annual Investment Allowance has been fixed for five years, but at far too low a rate of 200,000. This will not help as many small and medium-sized businesses to invest for the future.

The National Farmers' Union (NFU) did welcome this move.NFU chief economist Gail Soutar said: We are pleased that the Chancellor announced that he would be setting the Annual Investment Allowance permanently at 200,000.

"The NFU highlighted the need for the government to set a long term, substantial level for AIA in our manifesto in order to give some security to our farmers and growers who can better plan for the future by investing in their businesses which is particularly important during these volatile times. Unfortunately the current capital allowances system does not fully reflect the full cost of investment for farmers.

She did express disappoinment at the lack of action on wasting assets. "We had hoped to see some progress on buildings and fixed structures that are considered wasting assets. Similarly reductions in corporation tax will have a limited impact on the 92.5% of farm businesses that are sole traders and partnerships."

The Chancellor also announced that corporation tax will be cut to 19% in 2017 and 18% in 2020.

As reported already, local councils and mayors will be given the power to decide on Sunday Trading hours a measure that has been deemed as unnecessary, complicated and harmful by the Association of Convenience Stores.

Elsewhere a new VED tax for new cars from 2017 will be used to bankroll a roads fund from the end of the decade in an effort to improve the nations infrastructure.

Want more stories like this in your inbox?

Sign up for our FREE email newsletter

Keywords:

User Login

Spotlight

Webinars 
Guides 

Most read

Social

Should the meat industry pay for compulsory abattoir CCTV monitoring?

Calendar