Partner Article

A Good Budget for Small Businesses

It was a positive Budget for small businesses, with the Chancellor asserting that one of the Budget’s aims is to back the small business owner. As well as promising a major review of the small business tax rate, he announced improved economic growth forecasts and measures that will not only directly affect growing businesses for the better, but will also send a message to the budding entrepreneurs that Britain relies on.

Of particular note for small businesses and the self-employed is the Chancellor’s plan to end the annual tax return within the next five years. HMRC will automatically collate the tax affairs of millions of Britons from employers, banks and investment firms into a single “digital” tax account which can be checked at any time online. The Chancellor’s tax return reform would affect 11 million people, of which 4 million run their own businesses.

Taking accounts online is a positive move for any small business and even before this announcement, the International Data Association predicted that half of small businesses would be using cloud accounting by 2016. This is because getting a complete overview of finances at the touch of a button enables individuals and businesses to make better informed financial and business decisions very quickly. It saves significant time and reduces data entry errors and, for those in the cloud, it allows financial decisions to be made on the go. It’s an interesting opportunity for accountants too, as it allows them to evolve the services they offer beyond simple compliance jobs and become more of a financial advisor which we know small businesses want.

This is a big time and money saving initiative by the Government, and additionally, the announcement of the abolishment of class two National Insurance contributions for the self-employed will only further simplify the administrative tasks involved for small businesses when it comes to paying taxes.

We back any move by the Government to support small businesses; this follows on from a strong Autumn Statement in helping to keep SMEs at the heart of our economy.

This was posted in Bdaily's Members' News section by Rich Preece .