It’d be easy to assume there are no winners in the “tax and axe” emergency budget.
You’d be wrong.
It’s a great budget for entrepreneurs.
Entrepreneurs’ Relief Lifted To £5 Million
If you sell a business, you only pay 10% on the first £5m of gains, as opposed to the previous £2m limit.
OK, it’s a “lifetime” allowance, so you’re only incentivised to build your first business in the UK before disappearing to sunnier climes. But it’s an improvement none the less.
And for those expecting a gain of over £5m, there was good news too. The rest of your windfall “only” gets taxed at 28% instead of the expected 40-50%.
Looking historically at CGT it’s gone up a LOT in recent years, so a good job of “managing expectations” by the spin doctors I think.
Exemption from NI
If you’re starting a business outside of the south-east then you’re exempt from the first £5k of employers NI contribution for each of your first 10 members of staff. A great way to encourage small business to take on more staff.
It’s a shame it’s not been extended to include businesses that are already trading and growing though.
The tax you pay on your profits has been reduced to 20%. Still not as low as more friendlier territories such as Ireland but still an improvement
VAT is being fiddled with again – rising from 17.5% to 20%. Not too big a deal for those selling to other businesses. More of an inconvenience. Ofcourse, web-based accounting software like KashFlow will make the change very easy – just one click of the mouse.
Sensibly, this change comes in on Jan 4th instead of Jan 1st as per the recent changes to VAT.
It’s good to see entrepreneurs and start-ups have been largely protected from the cuts and tax rises. Whilst big firms are making redundancies, many start-ups and SMEs including ourselves are creating jobs, so it’s nice to see the important role we play in the economy being recognised.