Business Management Tax

More budget sleight of hand…

Budgets come and go each year (sometimes twice). They are full of spin and disguise as ‘good news’ offsets ‘bad news’ and what appears to be given in one hand is taken away by the other. Like a magic trick, it is difficult to keep a track of the movements and the pound is certainly quicker than the eye when hidden amongst percentages, investments and the promise of better times to come.

The only difference between magic tricks like those of the late, great Paul Daniels and the budget is that he was always liked, loved and enjoyed, and the other ‘not a lot’.

Last week’s budget was no different!

The attempted diversion sweetener of the sugar tax headline was soon dissolved in the hot water produced by Iain Duncan Smith’s resignation. This put the focus on the confusion of the disability benefits announcement and has turned out to be the number one debate in the aftermath.

The reality is, however, that there was a whole lot more going on in the budget than just sugar and benefits. Important as these things are, and I have my personal view on them like everyone else, my focus (in this post at least) is on the impact that it will have on small businesses.

A few small business headlines of note:

  • Class 2 National Insurance contributions will be stopping from April 2018
  • Business rate relief threshold is set to increase from April 2017

Note: Although the headline 100% relief in small business rates for properties with a rateable value of £12,000 or less may initially appear to be a bonus for the small business, we offer a word of caution! Both the extension to the exempt rateable value and the revaluation of the rateable value of all businesses start in April 2017!

  • Capital allowances extension for Enterprise Zones
  • The new dividend tax…

Note: A good accountant is always looking for ways to help you to save tax (straight up – no tricks). So, if you receive dividends, either from your company or from a share portfolio, then the new dividend tax will be of special interest to you.

To help you see through some of the smoke and mirrors and get to the bottom line ‘truth’ you can download a free copy of the Meades budget highlight summary here:

Simply hover over the ‘resources’ tab and click on ‘Budget 2016’ to download your free copy.

To close this budget flavoured post with another tinge of magical reference I’d just like to pay my respects, once more, to the great Paul Daniels who passed away last week. His sleight of hand was pure genius and created entertainment and wonder that delighted a generation. Thank you Paul.