By Daniel Hunter
The UK200Group of independent accountants and lawyers, which represent approximately 150,000 small and medium-sized businesses (SMEs), have welcomed key measures introduced in the Budget for businesses.
In what was labelled as a Budget for an 'Aspiration Nation' George Osborne cut the financial burden on SMEs by taking off the first £2,000 of employer National Insurance (NI) bills from April 2014, in the process lifting 450,000 SMEs out of employer NICs altogether.
Osborne also introduced other “business friendly” measures including a further 1% cut in Corporation Tax to 20% by April 2015, while Stamp Duty is to be scrapped on shares traded on growth markets like AIM.
Other measures introduced include an extension of the Capital Gains Tax (CGT) holiday for investors in the Seed Enterprise Investment Scheme, tax relief for social enterprises and further tax avoidance and evasion measures — including the introduction of a GAAR in 2014.
“As our members represent a large proportion of the UK SME market, these measures, particularly the employer NIC allowance, are most welcome," David Challenger, President of the UK200Group, said.
“Lifting 450,000 small businesses out of employer NI will ensure that business owners are given extra confidence to take on new staff and invest in their businesses.
“While the Budget wasn’t a “give-away” Budget, Osborne has certainly done the best he can in difficult circumstances to make life a little easier for SMEs.”
David Whiscombe, tax director at UK200Group member firm Berg Kaprow Lewis, added: “For a Chancellor with no money to distribute and an economy which continues to struggle to recover from the shocks it has suffered in recent years, Mr Osborne seems to have been surprisingly generous - though of course, as for any Chancellor, “surprisingly generous” means “seizing a little less of our money than he might have done”.
“The £2,000 “employment allowance” (effectively a rebate of employers’ National Insurance) is a very welcome lifting, in a small way, of the taxes which successive governments have, mystifyingly heaped on job creation.
“The first small steps will be taken towards encouraging employee ownership of shares, first by the proposed relief from CGT for selling shares to employees and second by allowing a company to give an employee £2,000’s worth of shares tax-free.
“These moves will particularly benefit smaller companies and coupled with the CGT reliefs for Enterprise Management Incentive shares already announced, make it increasingly attractive for employees to hold shares in their employers company.
“Slightly less satisfactory is the announcement that the government is to look at the way in which partnerships are taxed: the present system works, it is reasonably well understood, and really does not require any tinkering from HMRC.”
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