The 2016 Budget reveals sweet and sour news for SMEs
Published: 17 March 2016
Last Wednesday (March 16), the government released this year’s much-anticipated Budget. The 2016 document included scrapping the Class 2 National Insurance contributions and creating two new £1,000 allowances for property and trading income, which could be good news for SMEs. However, it also revealed some less exciting announcements for UK businesses.
Ed Molyneux, CEO and co-founder of FreeAgent, a UK online accounting software system, commented: “On first look, there seems to be some good news for small business owners in this year’s Budget. NIC2s (Class 2 National Insurance contributions) will be scrapped, business rate relief doubled, cuts made to Capital Gains Tax and corporate stamp duty – all of which are positive announcements.
“But I think the Budget is also a bit of a missed opportunity when it comes to small business tax reform. There’s very little information about how the government actually plans to make tax simpler for self-employed people, or if it plans to follow through on any ideas put forth by the Office of Tax Simplification other than a closer alignment of income tax and NI contributions.
“There’s also little for contractors to get excited about either. There are no amendments to the forthcoming travel and subsistence tax relief changes, which is a huge blow because, in their current form, the changes will unfairly penalise contractors and could potentially put their businesses at risk. I would personally have liked to see an alternative approach such as allowing travel and subsistence claims for any home-to-work journeys longer than the national average.”
