It’s not everyday that you get invited to represent what Small Business wants at a national level on BBC News minutes before the Chancellor, George Osbourne, presents the UK Budget for 2015.
As a student of economics and advisor to small business, it was an honour to comment on what Small Businesses wanted to see in the budget on 18th March 2015.
Watch the 3min interview (below) with Joanna Gosling where we discuss what Small Businesses really want, just minutes before the chancellor emerges from number 11 Downing Street holding up the ‘red box’ and proceeding to kick off the budget.
I’ve very much enjoyed campaigning for small business and will continue to do so for our voices to be heard. (I’d love to hear your thoughts in the comment box below if you feel there is something more pressing for small businesses that needs to be addressed here in the UK).
P.S. Some insights for small business are shared below .
As a small business if you are wondering what are some of top changes included in the Budget of 2015, please read below the points explained and compiled by London based accountancy firm 2E Accountants Ltd.
UK Budget: Some of the Immediate and top changes
1) Entrepreneurs’ relief
Entrepreneurs’ relief (ER) applies a 10% rate of capital gains tax to gains made on the disposal of all or part of a business, shares in the shareholder’s personal company, and from assets which were used in the business or company. This last category is called an associated disposal if the disposal happens at around the same time that the shareholder or business owner sells their shares in the company or interest in their partnership.
Until now the law has not specified what percentage of the company or partnership the person must dispose of in order to get ER on the associated disposal of another business asset. From 18 March 2015 the individual will have to sell (or give away) at least 5% of the company’s shares or at least a 5% interest in the partnership for an associated disposal of a business asset to qualify for ER.
This change should not affect people who are planning to sell their whole company or partnership, or a significant stake (over 5%) in that business.
One of the conditions for achieving ER on the sale of a company’s shares is that the company must be a trading company or the holding company of a trading group. From 18 March 2015 there is a minor change to the definition of what counts as a trading group: the activities of joint venture companies are excluded. This is designed to target artificial arrangements where the shareholder holds their interest in the business mostly through a joint venture and not directly in the trading company.
2) Wasting assets
A wasting asset is an item of moveable plant or machinery which generally decreases in value over time. In very rare circumstances the value of such assets may appreciate over time, examples could include high quality musical instruments, or fine art paintings. If the item is used for a trade, the increase in its value may escape CGT when it is sold.
The law is to be changed to ensure that the item must be used in the owner’s trade to qualify for this potential tax exemption, and not lent briefly to another person in order to attract the tax exemption.
The Landlord’s Energy Saving Allowance worth up to £1,500 for the cost of insulation installed in let properties will not be available beyond 31 March 2015 for corporate landlords. This allowance will cease to be available on 5 April 2015 for unincorporated landlords.
4) Capital allowances
Anti-avoidance provisions will take effect from 26 February 2015 to restrict to nil the expenditure qualifying for plant and machinery capital allowances in a sale and leaseback or connected party transaction. This rue will apply where the person disposing of the asset, or a person connected with them, acquired the asset without incurring capital expenditure or an arm’s length amount of revenue expenditure.
– Future promises-
Supporting British Farmers
Farming can be quite challenging due to the seasonality of the crop, the uncertainty and the stiff competition. Several farming businesses have had a tough time recently. Currently farmers can average out their income over two years for income tax purposes, so they pay tax on the average for two years. The Government will consult on changing this averaging period to five years to take effect from 6 April 2016.
The list of designated energy-saving and water-efficient technologies qualifying for an Enhanced Capital Allowance will be updated during the summer 2015, subject to state aid approval.
Businesses can benefit from 100% tax deduction in the year of purchase for the cost of capital items which are covered by the Annual Investment Allowance (AIA). This allowance has an annual limit per business or group of companies of £500,000, but is set to reduce to £25,000 on 1 January 2016. The Government will review the level of the AIA during the Autumn statement in 2015, and expects to keep the AIA limit at a “generous level”.