ALTHOUGH the big announcements in the Chancellor’s budget were the revisions to the UK’s growth forecasts and a new tax on sugary drinks, there are some significant changes on the way which will have a big impact on businesses here in Northamptonshire.
The real winners in the budget were small businesses which will see business rate relief thresholds rising from £6,000 to £12,000 and from £18,000 to £51,000 for the higher rate.
ALTHOUGH the big announcements in the Chancellor’s budget were the revisions to the UK’s growth forecasts and a new tax on sugary drinks, there are some significant changes on the way which will have a big impact on businesses here in Northamptonshire.
The real winners in the budget were small businesses which will see business rate relief thresholds rising from £6,000 to £12,000 and from £18,000 to £51,000 for the higher rate. As a result, 630,000 UK small firms will not pay any business rates at all from April 2017 which is expected to save around £7 billion collectively each year.
Corporation tax is also set to fall from 20% to 17% by 2020 which will be welcomed by all businesses, helping them continue to expand and create jobs.
However, a concern from this Budget centres around the hard pressed, often very dynamic mid-sized business in the UK. We heard a lot about addressing tax compliance for large companies by closing down loopholes and George Osborne explained the additional revenue generated would help small, sometimes micro businesses, taking some out of the tax bracket altogether.
But what about the hard pressed middle? As usual, they tend to be lumped in as ‘large’ even though their characteristics are unique and the burdens they face demand specific attention.
Closer to home, the Budget confirmed Government’s on-going support for the ‘Midlands Engine’ by announcing some significant investment in the region including further improvements to the M1. However, this was somewhat overshadowed by announcements in support of the Northern Powerhouse.
The Chancellor forecasts a million jobs will be created by 2020. However, Grant Thornton’s Northamptonshire Limited report, which looks at the health of the local economy, highlighted last year a big concern over skills shortages. So unless this is addressed, local businesses will continue to struggle to find the right staff to fill the positions needed to grow.
George Osborne also outlined several anti-tax-avoidance measures which he believes will raise around £12 billion by 2020. This will help to create a more level playing field and will be welcomed by SMEs where the vast majority play by the rules – as long as it doesn’t further complicate the tax system with more red tape.
Overall, it was a good Budget for Northamptonshire’s businesses with the drop in corporation tax and increase in the business rate thresholds welcomed by many. But it was disappointing we didn’t see any measures announced to simplify the UK’s complicated tax system which would greatly benefit businesses here in the region.
