The Chancellor’s speech on Wednesday contained a number of positive measures for SMEs, confirming falling business rates and a series of reductions in rates of corporation tax.
Here’s a brief summary of some of the measures that may be of particular interest to SMEs:
- Business rates
From April 2017 business rates on properties with a rateable value of £12,000 or less will be abolished, and tapered for those worth up to £15,000. As a result, some 60,000 small firms will not have to pay business rates, while 250,000 will pay lower rates.
- Corporation tax
The Chancellor is extending the reduction in corporation tax by an additional 1% to 17% from 2020.
- Capital allowances on business cars
The current 100% first year allowance on businesses purchasing low emission cars will be extended to April 2021. The CO2 emission threshold for the main rate of capital allowances for business cars will reduce from 130 gm/km to 110 gm/km from April 2018.
- Making tax digital
From 2018 businesses who are keeping records digitally and providing regular digital updates to HMRC will be able to adopt pay-as-you-go tax payments. This will enable them to choose payment patterns that suit them and better manage their cash flow.
- Petroleum Revenue Tax (PRT)
The rate of PRT will be permanently reduced to zero for all chargeable periods ending after 31 December 2015.
