Saturday, June 15, 2024

Mix of Good and Bad News For SMEs In The UK

Ed Molyneux, CEO and co-founder of FreeAgent, said:

“On first look, there seems to be some good news for small business owners in this year’s Budget. NIC2s will be scrapped, business rate relief doubled, cuts made to Capital Gains Tax and corporate stamp duty and the Government is going to create two new £1,000 allowances for property and trading income – all of which are positive announcements.”

“But I think the Budget is also a bit of a missed opportunity when it comes to small business tax reform. There’s very little information about how the Government actually plans to make tax simpler for self-employed people, or if it plans to follow through on any ideas put forth by the Office of Tax Simplification other than a closer alignment of income tax and NI contributions.”

“There’s also little for contractors to get excited about either. There are no amendments to the forthcoming travel and subsistence tax relief changes which is a huge blow because, in their current form, the changes will unfairly penalise contractors and could potentially put their businesses at risk. I would personally have liked to see an alternative approach such as allowing travel and subsistence claims for any home to work journeys longer than the national average.”

“And once again, the Government has shown that it has no intention of dealing with the issue of IR35. Despite its intended goal of highlighting false self-employment and tackling tax avoidance, IR35 actually has a real, detrimental effect on small 1-2 person businesses and IT contractors who run their business as a limited companies and take short-term contracts. I remain hopeful that it will eventually be replaced with simpler, more

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