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July 8, 2015
Summer Budget 2015: Impact on SMEs
Today was the first fully Conservative budget since 1996. Chancellor George Osborne announced a raft of new proposals, many of which will have a huge impact on businesses.
The most significant announcements for UK SMEs included landmark changes to Sunday trading hours, Corporation Tax and – the biggest one – a new Minimum Wage, designed to meet the National Living Wage.
Here are some of the most important points for you to take away from the Budget…
New National Living Wage
The biggest announcement of the Summer Budget was the plans for a new National Living Wage. The wage will start at £7.20 an hour from April 2016, rising to £9 an hour by 2020 for people 25 and older. Osborne said: “Britain deserves a pay rise”.
This is the biggest rise to the national minimum wage in years, so small businesses may want to review their financial plans.
Changes to Sunday Trading Hours
Local authorities and city mayors will now have the authority to set the hours for Sunday shop opening and closing hours.
The Chancellor claims that change will allow local areas to have a greater say over their own economies.
Having already reduced Corporation Tax to 20%, the Government it will cut it again to 19% in 2017 and 18% by 2020. “Businesses can grow and invest with confidence,” says Osborne.
National Insurance contributions
The National Insurance contributions (NICs) Employment Allowance will increase from £2,000 to £3,000 a year from April 2016.
This will help businesses with additional wage costs from the new National Minimum Wage.
Annual Investment Allowance
From January 2006, the annual investment allowance will be fixed at £200,000. This gives businsesses an allowance of £200,000 for necessary business items, allowing for full tax relief in the year that items are purchased rather than over several years.