Budget 2010: short and sweet unless you make cider
What did yesterday’s Budget contain for freelancers, contractors and other small service-based businesses?
Actually quite a lot of helpful and potential money-saving stuff. Here’s a quick summary.
Annual Investment Allowance increase
At the moment, if any business spends up to £50,000 a year on most kinds of capital equipment, the cost of that equipment is taken off the business’s profit before the tax is worked out.
As from 1st April 2010 for companies, and 6th April 2010 for sole traders and partnerships, that limit’s going to go up to £100,000.
Good news if you’re planning to buy a large and VERY expensive item.
Just be careful what kind of asset you buy, though, because not all assets are covered by the allowance. The classic one that isn’t covered, and so can’t be taken off your business’s profit, is a car.
VAT thresholds gone up
Don’t want to register for VAT because most of your customers are members of the public?
Good news. From 1st April 2010 the annual taxable turnover threshold for compulsory registration will go up from £68,000 to £70,000.
Business rates cut for a year from October
If you’re a small business paying business rates for your premises, you’ll be glad to hear that from October 2010 you could be paying less.
That’s not a permanent cut, though, so beware of the sting in the tail come October 2011 when they could go back up.
The cut applies to properties with a rateable value of under £12,000 (so that’s those who already qualify for small business rate relief), and properties whose rateable value is under £6,000 will pay no business rates at all for that year. Nice.
More capital gains come under entrepreneurs’ relief
At the moment, when an individual small business owner or investor sells certain assets, the first £1m of gains are reduced by 4/9 for entrepreneurs’ relief.
That £1m will now go up to £2m.
Additional finance for "university innovations"
The Government’s planning to invest up to £25 million in a University Enterprise Capital Fund, to provide “crucial early stage funding for the commercialisation of some of the most promising university innovations”.
They’re hoping this will also attract private investment of up to £10 million.
Around-the-web opinion seems to be divided as to whether that fund will be made available to the universities, or to new graduates planning to start a business - and there's no information as yet on whether, if the fund is for the universities, whether they'll have the option to make grants to student business owners. We'll be following developments of this one with interest!
There’s planned investment into capital growth funds, encouragement for the state-owned banks to provide more lending to small businesses - and a credit adjudicator giving right of appeal for small businesses if a loan application is refused.
So there are quite a few nice little nuggets in there for small business owners.
Let’s hope they aren’t repealed if the Government changes in a couple of months!
- National Coworking Day 2018
- How FreeAgent can help you comply with GDPR
- Help us give small businesses a big voice
- Self Assessment filing for 2017/18 is live
- Introducing Insights!