10 points for small businesses in the 2014 Budget

Radical changes to the pensions system have dominated the headlines in the aftermath of the 2014 Budget, and this has rather overshadowed the small business tax giveaway worth an estimated £11bn over the next five years. Here, we seek to redress the balance by listing 10 key points from the 2014 Budget relevant to small businesses and their tax advisors:

1. Exporting support. An extra £1.5bn of funding is to be made to the UK Export Finance scheme to help small businesses trade overseas “so that wherever you are around the world you can’t fail to see: Made in Britain” [George Osborne].
2. Manufacturing support. A combination of measures to support manufacturers is estimated to save a medium-sized manufacturer around £50,000 a year in 2018/19. They include: doubling the annual investment allowance (AIA) to £500,000 from 1 April until the end of 2015; a £7bn package of reforms designed to “radically reduce the costs of energy policy for business”; and a new compensation scheme to help energy intensive industries manage their electricity costs.
3. Apprentices. An extra £85m funding is to be given to the Apprenticeship Grants for Employers scheme in both 2014/15 and 2015/16. This is estimated to provide support for over 100,000 more apprentices, who are often recruited by small businesses looking for cost-effective labour.
4. Fuel and transport. The current freeze on fuel duty is to continue until Spring 2015, in a move that Federation of Small Business (FSB) national chairman John Allan said would be “welcome to small firms still struggling with the cost of fuel at the pump … the government is finally recognising the more prominent transport challenges for small firms and the importance of local roads to run and grow their business.”
5. R&D tax credits. Loss-making small businesses who are investing in research and development will be able to get tax credits from the Government for this expenditure, rising this year to 14.5% from 11% last year.
6. Business lending. A consultation will be undertaken on legislation to help match SMEs who are turned down for traditional bank finance with alternative lenders, such as the peer-to-peer lending platform Funding Circle. The British Business Bank is to issue a request for proposals to implement a wholesale guarantees programme alongside the budget.
7. Business rate relief. The current £1,000 business rate relief will continue into next year, amounting to a £750m injection for the high street, according to Simon Tivey from PricewaterhouseCoopers.
8. Enterprise zones. Enterprise zones, which supports businesses that base themselves in less affluent areas, will also be extended for another three years. Companies located in Enterprise zones can claim discounts on business rates and higher capital allowances.
9. Property funding. Of interest to builders and buy to let landlords is the decision to invest £500m in small house building firms, as well as a further £150m to fund the Right to Build scheme.
10. SEIS and CGT. The Seed Enterprise Investment Scheme (SEIS) and capital gains tax 50% reinvestment relief are to be made permanent, in a move designed to stimulate ‘angel’ investment in small UK companies.

The 2014 Budget has been largely welcomed by businesses, with Simon Walker, of the Institute of Directors, deeming it “responsible and imaginative”. If you run a small business and want to find out how you can take advantage of some of the above items, just contact us and we’d love to help you.