Budget 2014 – What help was there for small business?

Mr Osborne will be cheered by the recent news that the economy is recovering, however there is concern that this is based too much on consumer spending. He therefore wants to encourage manufacturing and exports.

To boost the economy and particularly the construction industry it was announced that the “Help to Buy” scheme will be extended to 2020 and a number of high profile infrastructure schemes.

It had previously been announced that the main corporation rate would be reduced and the Chancellor helped further helped businesses by announcing that the Annual Investment Allowance would be increased to £500,000 meaning that capital expenditure for the majority of companies would be fully tax deductible in the year incurred.

To encourage exports lending via the government backed UK Export Finance scheme to UK businesses will be doubled to £3m and the interest rate charged cut by a third.

For smaller businesses he announced support in the extension of the small business rates exemption and the Employment Allowance which gives rebate of £2,000 on all employers NIC payments. There is also a £1,000 reduction in business rates for retail businesses.

He also announced plans to abolish the weekly Class 2 national insurance contributions for the self-employed from 2016. This is a simplification rather than a saving as the contributions will be collected through self-assessment system.

Mr Osborne also announced help to control fuel costs for businesses that use large amounts of energy.

Whilst many small business will welcome the reductions in employers national insurance contributions and business rates the changes to capital allowances will only help businesses that are able to make large capital investments .