The Chancellor, George Osborne had welcome news for small and medium size businesses when he delivered the budget yesterday. Here are the main points that affect small businesses:
* the business rate relief threshold has been increased from £6k - £15k and £18k - £51k at the higher end;
* corporation tax will be reduced to 17% by 2020
* commercial stamp duty of 0% on property purchases up to £150k;
* from 2018 self-employed people will no longer have to pay class 2 national insurance contributions;
* the threshold for paying income tax will increase to £11,500 by 2017;
* the threshold for paying the higher rate of tax is also to be raised, from £43,000 to £45,000 in the tax year 2017/18.
The effect of the business rate relief is significant as it is estimated that up to 600,000 businesses will not have to pay any business rates from 2017.
Mr Osborne called this the "Budget for small business". This is definitely a step in the right direction.
From April 2017, 600,000 small firms will not have to pay business rates, while 250,000 will pay lower rates. To fund the giveaway, the chancellor capped debt interest payments used by larger firms to cut their corporation tax bills, to 30% of earnings. George Osborne also said corporation tax would be cut to 17% by 2020.