How Will SMEs be Affected?
Each and every year the budget sends a mixture of shockwaves and screams of relief across the country, and whilst the proposed and implemented changes detailed affect everyone, the impact on small to medium sized enterprises (SMEs) is what we’d like to focus on today. Chancellor of the Exchequer George Osborne unveiled his summer Budget earlier this month, but how will the changes affect how you do business this year, the next and even the year after that?
As a leading provider of high quality accounting services, we specialise in delivering support for business accounts to ensure companies of all sizes can reap the rewards of solid, reliable and jargon-free accounting advice. Here we reveal just what the Budget 2015 will mean for SMEs based across the country so you can face the next tax year with confidence.
For limited companies, some unincorporated associations and even foreign companies with a UK branch or office, keeping records for corporation tax is an important part of keeping your business accounts up to date. The Budget 2015 announced that the rate of corporation tax paid by companies is set to fall to 19% in 2017 and to 18% in 2020. This would make our corporation tax rate the lowest in the G20! However, for small to medium sized enterprises that don’t have huge profit margins the dwindling rate isn’t something you could benefit from.
The National Living Wage
Minimum wage has a brand new name – now known as the National Living Wage, the changes here were deemed the ‘jewel in the crown’ of the summer Budget. From April 2016 the new minimum wage will be £7.20, an hourly figure that will rise to £9 by 2020.
The changes are likely to affect start-up businesses and small to medium sized enterprises the most as evidently the increasing National Living Wage will mean the tightest of budgets will need to stretch further to gain the staff and skill levels they require to progress forward. The Government however also revealed plans to minimise impact on the most vulnerable organisations, the national insurance employment allowance for example will increase from £2,000 to £3,000 to ensure small business owners have the means to keep their employment costs manageable.
Business rates and rents
Unfortunately, clients looking for business accounts advice on rates and rents will be disappointed. The Budget 2015 revealed no changes to both areas and the issue of late payments, a problem that has blighted much of the business community, was also left unaddressed.
For the latest advice regarding your business accounts, contact us today on 0191 251 7599.