A budget for businesses
As Chancellor George Osborne made his budget speech on Wednesday, it created a raft of positivity for businesses across the UK.
A major reform stands to help businesses with investment and exports, both of which should significantly boost Britain’s recovering economy.
The annual tax allowance for investments has been doubled to £500,000, while the amount of credit available to support overseas sales has also doubled to £3bn.
Both moves send out a sensational signal that the government is prepared to do all it can to help businesses in the run up to the next general election.
Manufacturers especially will benefit from the 2014 Budget, as it aims to bolster exports, investments, regional development and skills in the sector.
At the same time, energy bills for these companies were slashed in what Mr Osborne described as a £7bn package.
A significant boost for businesses
The carbon floor price – a tax on electricity generated from fossil fuels – was capped at £18 per tonne of CO2 from 2016-17, meaning a mid-sized manufacturer could save almost £50,000 on annual energy bills.
At a time when finances have been a particular issue for companies, and where cases of company administration and business overhaul have been high, the Budget represents a significant boost.
By doubling the annual investment allowance against corporation tax to £500,000, Mr Osborne said 99% of companies would pay no tax on money used for capital spending.
This policy on its own stands to cost £2bn, although it could provide additional funds for many companies to consider other avenues, such as additional marketing, advertising or research and development.
Meanwhile, the extension of business rate discounts and of enhanced capital allowances in enterprise zones stand to make further savings possible for businesses.
Businesses with the potential to drive growth are the focus of the latest budget and come at a critical point in the recovery.
“Osborne’s focus on investment, exports, house building and economic resilience passes the business test,” said John Longworth, British Chambers of Commerce director-general.
By Phil Smith