Last week’s Budget saw a number of changes that will affect our business clients with a number of them being largely advantageous.
Reform to business rates.
From April 2017, small businesses that occupy property with a rateable value of £12,000 or less will pay NO business rates. It is estimated that this increase from the previous £6,000 threshold will mean that more that 600,000 small businesses will pay no business rates. This will be a welcome change for many small and medium-sized enterprises, many of which currently find their high business rates to be a significant expense.
There will also be a tapered rate of relief for properties worth up to £15,000.
Reduced stamp duty for commercial property.
There is a change in the way stamp duty will be calculated on freehold commercial property and leasehold premium transactions. From 17 March 2016, rates apply to the value of the property over each tax band. In short, this means that buyers of commercial property worth up to £1.05m will pay less in stamp duty.
Cuts to corporation tax and CGT (capital gains tax).
Corporation tax will be cut from 201% to 17% in 2020. It is hard to tell what the true effect of this will be until full details emerge in the Finance Bill, however it is thought that over one million businesses will benefit. It is likely to benefit larger companies as opposed to SMEs. The higher CGT will be reduced from 28% to 20% from April 2016, with the basic rate dropping from 18% to 10%.
Changes to the income tax personal allowance and a further freeze in fuel duty should provide a degree of help to the average household. We hope that this in turn translates into good news for businesses.
If you would like to discuss your business legal requirements with a member of our Company and Commercial team, please call 0117 926 4121.