Chancellor George Osborne has introduced a range of measures aimed at reducing the tax burden for small businesses, including a drop in business rates and commercial property stamp duty rates, as he revealed in his Budget today.
In a packed Budget, which Osborne promised would "put stability first" but would also put "rocket boosters on the backs of enterprise and productive investment", the chancellor revealed growth figures for the UK economy were revised down.
While in 2015, according to figures from the Office for Budget Responsibility (OBR), GDP growth was 2.2%, it would be 2% in 2016, 2.2% in 2017 and 2.1% in each of the three years after that.
However, in a bid to try and bolster business, and particularly small businesses, Osborne promised revisions to a tax system that he said was "tilted against our small firms".
From April 2017, small businesses that occupy property with a rateable value of £12,000 or less will pay no business rates. Currently this is available if you are a business that occupies a property with a value of £6,000 or less. Meanwhile, there will be a tapered rate relief on properties with a rateable value worth up to £15,000. Osborne said the measure would see 600,000 small businesses pay no business rates at all, with a further quarter seeing rates cut.
And commercial stamp duty has also been changed, effective from 17 March this year. Currently the rates apply for the whole transaction value but from midnight tonight, they will apply to the value of the property over each tax band, with the rate for the portion of the transaction value up to £150,000 at 0%, at 2% between £150,001 and £250,000, and 5% above £250,000. Osborne said 9% of firms would pay more as a result of the changes, with 90% paying less.
Among other notable changes were a further reduction in corporation tax to 17% from April 2017, and a freeze in both fuel duty, and duty on beer and cider for the sixth year in a row. Duty on Scotch whisky was also frozen.
There will also be a new sugar levy on the soft drinks industry. It will be levied on the companies producing soft drinks, and introduced in two years' time. Pure fruit juice and milk-based drinks will be excluded.
And there was a boost for users of ‘sharing economy' websites such as Airbnb, which is causing disruption to the hotel market. Osborne said: "We're going to help the new world of micro-entrepreneurs who sell services online or rent out their homes through the internet.
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