The announcement was accompanied with a positive growth forecast from The Office of Budget Responsibility predicting growth of 2.7% this year, suggesting that we have surpassed the pre-crisis peak earlier than expected and pointing to improved forecasts for the year ahead.
The headline Budget announcements were on energy policies and export. When combined with the cost measures to help small businesses announced in the Autumn Statement, the Chancellor sent out a positive message to invest and grow in the year ahead.
Here's a quick summary of the key measures that will have an impact on your business:
The National Minimum Wage will increase for adults (21+) in October 2014 by 19p to £6.50 (a 3% rise) and increase for 18-20 year olds to £5.13 and £3.79 16-17 year olds. The apprentice rate will also increase to £2.73.
The Coalition capped the rise in business rates at 2% for 2014-15, extended the doubling of small business rate relief until April 2015 and extended the Enterprise Zone business rates discount for a further 3 years. They have also committed to a review of business rates in 2017.
Corporation Tax will also be lowered to 21% in April 2014 and will fall to 20% by 2015. This applies to companies whose profits are more than £1.5m.
A £7bn package was announced to cut energy bills for business including capping the Carbon Price Support rate at £18 from 2016/17 to 2019/20 and providing targeted support to energy intensive industries.
Access to finance
The Government announced measures for better banking for businesses through opening up SME credit data to challenger banks and other finance providers.
In addition the Government will be looking into the idea of developing a service to match SMEs who are turned down for a loan with alternative lenders. It has also reached an agreement with the major banks to process most claims for a 'deed of priority' or 'waiver' within seven working days to speed up the process for SMEs seeking finance from challenger banks or other sources.
The Apprenticeship Grant for Employers (AGE grant) will be extended to December 2015 and from January 2015 the grant will be exclusively for small employers (fewer than 50 employees). Eligible businesses can claim up to £1,500 for an apprentice.
On the export front the Government will double the Direct Lending Scheme to £3bn and cut interest rates on that finance by a third to make it the most competitive export finance in Europe. Greater marketing of UK Export Finance will be undertaken to drive awareness the Export Refinancing Facility (ERF) will begin in April 2014 to support exports where buyers need loans over £50m.
From 1st April 2014 the R&D payable tax credit will be increased from 11% to 14.5%. Loss-making SMEs have the option to convert taxable losses attributable to R&D relief into a payable cash credit.
Annual Investment Allowance (AIA) which offers 100% tax relief on investment in qualifying new plant and machinery will also be doubled to £500,000 from 1 April 2014 and extended until the end of 2015.
Alongside the announcement of targeted support for infrastructure programmes in specific areas of the UK, was an additional £140m of available for damaged flood defences and a £200m pot hole fund which will enable local authorities to repair up to 3.2m pot holes.
Sector specific support
Welcome news for the construction sector was that a £500m Builders Finance Fund will be created to provide loans to developers to unlock 15,000 housing unit developments which have stalled. Help to Buy for new homes will also be extended until 2020, which will support over 200,000 new homes for families and generate additional building work supporting the construction industry.
For the licence trade the Chancellor announced 1p off beer duty in the Budget and the scrapping of the beer escalator.
Remember that the Forum is on hand to help you with any of the business issues above - call us on 0845 130 1722 for more information.