Although it came as no surprise the economic news was, well “paradoxical” – growth was cut from 2.4% to 2% for this year and from 2.5% to 2.2% for next year, borrowing forecasts were raised and there was a failure to meet the pledge to cut debt as a percentage of GDP every year. Or as Mr Osborne put it “The combination of our action to reduce borrowing this year, along with the revision to our nominal GDP driven by lower inflation, have produced this paradoxical result”, well precisely George.
Continuing the “paradoxical” theme we then had Jamie Oliver fronting the College Green cameras to help deflect, sorry manage sentiment. That said from where we sit there was actually a lot of positive small business news in this budget. These are the highlights for us:
- Business rates – new threshold for small business rate relief - businesses with a property with a rateable value of £12,000 and below will receive 100% relief. Businesses with a property with a rateable value between £12,000 and £15,000 will receive tapered relief.
- Corporation tax – reduced from 20% to 17% by 2020 along with a more flexible use of losses from April 2017
- Commercial Stamp Duty - will have a zero rate band on purchases up to £150,000; a 2% rate on the next £100,000; and a 5% top rate above £250,000
- Personal tax allowance - will increase to £11,500 from April 2017 with the 40% higher rate threshold rising to £45,000
- Capital Gains Tax - will be cut from 28% to 20% for higher rate taxpayers and from 18% to 10% for basic-rate taxpayers from April this year (residential property retains the old rates)
- Class 2 National Insurance – abolished for the self-employed from 2018
- ISA – the annual limit to rise to £20,000 from next year and the introduction of a lifetime ISA for under 40s
- South Wales Metro - £734m for better rail and bus travel in the valleys (umm yes Matthew)
“Levelling the playing field” for small business was the cry and we can’t help feeling somewhat pleased by that.