Spring Budget – Financial Benefits For SMEs
Small to medium-sized businesses in hospitality and leisure are among those that will benefit from the recent Spring Budget, though the government’s plans were more muted than had been hoped. The Queen’s Speech came against a background of rising living costs; and the Russian invasion of Ukraine, which is directly affecting the UK economy.
It was shortly followed by the release of figures indicating that inflation could soon reach 10% - which means the cost of living will increase further. These are the key headlines that commercial and tax lawyers need to know:
Business Support
There was a certain amount of financial support set out for businesses, particularly for SME business:
· Eligible SME businesses in the retail, hospitality and leisure sectors will see a temporary 50% discount on their business rates (up to a maximum of £110,000 per business). The business rates multiplier will also be frozen for the year 2022-2023
· The immediate reduction of 5p in fuel duty, which will benefit landlords, property investors, and the many businesses whose workers rely on driving to perform their jobs
· The employment support allowance for eligible employers will rise to £5,000 (up from £4,000)
· Financial support for those seeking to invest in education - the temporary £1 million level of the Annual Investment Allowance is extended to 31 March 2023.
· Business rates exemptions for eligible plant and machinery used in onsite renewable energy generation and storage – with effect from this April (this has been brought forward a year)
Income tax
Two key financial headlines benefiting individuals are that the primary threshold above which NIC starts to be paid will increase from £9,880 to £12,570 from this July; and the basic rate of income tax will drop from 20% to 19% from April 2024
Companies House
Finally, the new Economic Crime and Corporate Transparency Bill was also promised – which will (among other things) strengthen the accuracy and reliability of the Companies Register. Under this bill, the companies registrar will be given new powers enabling it to become a more effective ‘gatekeeper’ for the Company Register.
The Registrar would have the power, for example, to check, remove or decline information on (or submitted to) the Companies Register. In addition, individuals who manage, own and control companies and other UK registered entities will be subject to identity verification, investigation and enforcement powers operated by the Registrar.
It's also understood that all entities registered at Companies House will be required to have at least one fully verified natural person directly associated with them on the public register.
When the draft is published, we will update readers on the measures and proposals for enforcement.
If you would like us to cover an issue in the next NGM Tax Law Newsletter, we would be pleased to hear from you