George Osborne delivered his 2015 budget speech saying “Today I report on a Britain that is growing, creating jobs and paying its way.” “Britain is walking tall again.”
The economic environment in which our businesses operate is improving, in fact the UK has grown faster than any other advanced economy and has the potential to be the largest economy in Europe.
The 2015 budget brings welcome news for small and medium enterprises (SMEs) in the form of increased investment in UK Trade and Investment services to support and stimulate export, additional support for growing businesses and a doubling of the number of apprenticeships. Nevertheless high employment rates can bring challenges for SMEs in terms of recruiting and retaining the skilled staff they need to be competitive.
As many SMEs are developing their 2015/2016 business plans what difference will the 2015 budget make? The key points are summarised below:
The UK grew 2.6% in 2014, faster than any other advanced economy but lower than 3% predicted in December. 2.5% growth forecast in 2015, up from 2.4% predicted in December, followed by 2.3%, 2.3%, 2.3% and 2.4% in the next four years.
Trade deficit figures “the best for 15 years”.
We have record employment in the UK and the jobless rate is set to fall to 5.3%.
Annual paper tax returns to be abolished. For most businesses, the information needed will be automatically received.
The government is giving even more powers to local areas, with a new devolution deal for areas such as transport, business support and skills for West Yorkshire, and more planning powers for London.
Ten Enterprise Zones across the country are also being supported to go further to create growth and jobs.
Future economic success depends on future science success. The government is investing £140 million in world class research on the infrastructure and cities of the future, and £40 million in research into what is known as the Internet of Things. This is the next stage of the information revolution, connecting up everything from urban transport to medical devices to household appliances.
The government is also launching a new UK research initiative into the future potential of digital currency technology, supported by a £10 million increase in funding in this area.
Tax on “diverted profits” to come into effect next month, taxes multinational profits “artificially moved offshore”
Annual bank levy to rise to 0.21%, raising an extra £900m.
Supplementary charge on North Sea oil producers to be cut from 30% to 20% while petroleum revenue tax to fall from 50% to 30%.
New tax allowance to encourage investment in North Sea.
Review of business rates to support high street businesses and city deals.
Farmers to be allowed to average incomes for tax purposes over five years.
National Minimum Wage will increase by 20p per hour and the hourly rate for young and adult apprentices will increase by 20%.
Class two national insurance contributions for self employed to be abolished.