Excellent news for small businesses was announced by Alistair Darling as part of his pre-budget report today.
The measures Mr Darling is putting in place as a result include:
1. The increase in Corporation tax for small businesses to be deferred, leaving the 2010 tax rate unchanged.
2. The Enterprise Finance Guarantee scheme for bank loans to small businesses is to be extended for another 12 months; guaranteeing an additional £500 million of commercial loans.
3. The Time to Pay scheme that allows firms to spread out tax payments will be extended for as long as needed.
4. The Strategic Investment Fund that supports high-tech projects will be given a £200 million boost.
The only real down-side to the report was the announcement of National Insurance contributions to be increased by 0.5% for employers, employees and sole-traders. In addition to this Value Added Tax (VAT) is to be increased from 15 – 17.5% which is expected to affect consumer demand.
I expect EVERYONE (except the banks) will be happy to hear that the banks are to be taxed a one-off 50% payment for every bonus they pay out over £25,000, especially as many of us are still asking why are investment bankers receiving such large bonuses for doing such an appalling job?! Didn’t they get us in this mess in the first place?
Probably, most importantly of all, Mr Darling added that although this year has seen a drop of 4.75% to the economy we are expected to see growth (albeit slow) over the following three years. In 2010 the economy is expected to grow by 1 – 1.5% and in 2011 – 2012 the UK expects to see an economic increase of 3.5%.
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