Budget 2011 summary for small businesses

Budget 2011 summary for small businesses

The Wordle above illustrates the frequency of words that appeared in George Osborne’s Budget speech. The bigger the word, the more frequently it appeared – and so, we assume, the more important it is.

The biggest relevant words here are tax and new. Tax is understandable – there were a lot of announcements around the tax system and its simplification. New? Well, I guess the Chancellor took a lot of pride in announcing one "new" initiative after another.

We then have Britain (naturally) and growth. This, the Tories have been saying, would be a “Budget for growth”.  Was it? Well, given that the Budget was accompanied by a downgrading of growth forecasts, we’ve got to wonder… Nevertheless, the words business and businesses are reasonably prominent, too.

Work, however, is not. Neither is manufacturing, despite the apparent emphasis on this sector. One surprisingly large word is also. Well, maybe it’s not so surprising – this was, after all, something of an ‘also’ Budget. How many times did the Chancellor say, like a conjuror, “I promised you this, but I’m also giving you this.”

Are we impressed? It remains to be seen. Below is a very brief list of the key points for small firms. You can read our full round-up, as well as the reaction of businesses and business groups.

• 2011 growth forecast downgraded from 2.1% to 1.7%

Investment in growth

• 21 enterprise zones, with ten to follow later
• £2 billion pledged to the Green Investment Bank
• Funding for 12 university technical colleges, with more to follow
• An extra 40,000 apprenticeships for unemployed young people

Tax and business rates

• Small business tax cut from 21% to 20%; corporation tax cut by an additional 1%, from 28% to 26%
• VAT registration threshold increasing to £73,000, deregistration threshold increasing to £71,000
• Personal tax allowance to rise a further £630 to £8,015 in April 2012
• Doubling of entrepreneurs’ relief to £10 million
• A 100 per cent business rate discount worth up to £275,000 over five years to businesses that move into an Enterprise Zone
• Fuel duty cut by 1p per litre
• 43 tax reliefs to be scrapped as part of simplification of tax code

Regulation

• The right to request ‘Time to train’ will not be extended to businesses with less than 250 employees
• No new regulation on firms with fewer than 10 staff for three years

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