As Chancellor George Osborne starts to defend his missed budgets targets, we have pulled out a selection of announcements from his 8th budget for you to digest.
The government will:
- cut the rate of corporation tax to 17% in 2020, benefiting over one million companies, large and small;
- cut business rates for all properties in England, with 600,000 small firms paying no rates so that the business rates burden will fall by £6.7 billion over the next five years;
- cut the higher rate of Capital Gains Tax from 28% to 20% and the basic rate from 18% to 10% from April 2016 (except for residential property and carried interest), and extend entrepreneurs’ relief to long term investors in unlisted companies;
- cut National Insurance contributions for 3.4 million self-employed people, by abolishing Class 2 National Insurance;
- the government will transform business rates billing and collection. By 2022, local authority business rate systems will be linked to HMRC digital tax accounts so that businesses can manage their rates bills in one place alongside other taxes. As a first step, the government will work with local authorities across England to standardise business rate bills and ensure ratepayers have the option to receive and pay bills online by April 2017;
- a dedicated phone line and online forum for new businesses and self-employed individuals to get help and support about filing and paying their taxes for the first time, and on the transition to using digital services.
As announced at the Autumn Statement 2015, an apprenticeship levy will be introduced in April 2017, and employers that are committed to training will be able to get out more than they put in. From April 2017, employers will receive a 10% top-up to their monthly levy contributions in England and this will be available for them to spend on apprenticeship training through their digital account. The government will set out further details on the operating model in April and draft funding rates will be published in June.
- For the first time, direct government support will be available to adults wishing to study at any qualification level, from basic skills right the way up to PhD. During this parliament, loans will be introduced for level 3 to level 6 training in further education, part-time second degrees in STEM, and postgraduate taught master’s courses.
- Apprentice NMW raised from £3.30 to £3.40 per hour.
Whilst this is also welcome more needs to be done to ensure SMEs take advantage of apprentices and the Skills Funding Agency as most take up is by larger businesses.
The government is now announcing further steps in the allocation of the Local Growth Fund, including:
- up to £1.8 billion will be allocated through a further round of Growth Deals with Local Enterprise Partnerships (LEPs) later this year. Timeline for process to be announced next week. Subsequent funding allocations would be announced as part of the autumn statement.
- a further £2 billion of the Local Growth Fund is being allocated through the Home Building Fund. This programme provides finance to developers to unlock large housing sites and bring forward the necessary infrastructure that large house building projects require. This funding will not come via LEPs, but there may be a requirement for developers to confirm the LEP’s support for their bids.
Local Enterprise Partnership Small Business Representative – The government will require all Local Enterprise Partnerships to have a nominated Small Business Representative on their Board in response to concerns that LEPs’ membership needed to be more reflective of each area’s business population given plans for LEPs to sign of 2p business rates precept.
Digital and Connectivity
The government will:
- establish a new Broadband Investment Fund, in partnership with private sector investors, to support the growth of alternative broadband networks by providing greater access to finance;
- deliver a 5G strategy in 2017, based on an assessment by the National Infrastructure Commission of how the UK can become a world leader in 5G;