Cheshire Independent Issue 186

APRIL 2024 18 BUDGET SPECIAL Independent BUSINESS IN a welcome devel- opment, chancellor Jeremy Hunt lifted the VAT threshold for small businesses in his statement. He announced that it would be increased from £85,000 to £90,000 from the beginning of April. It will be the first increase in seven years and the chancellor said the move would lift tens of thousands of busi- nesses out of paying VAT. Announcing the move, Mr Hunt said it would help businesses to grow and add that there was a need to “reward smaller businesses who make a big impact on our soci- ety and employ millions of people.” According to gov- ernment officials the increase will take about 28,000 small busi- nesses out of paying VAT altogether. The Treasury said: “The government rec- ognises that VAT can be a burden for some small businesses.” The Federation of Sma l l Businesses (FSB) had called for the threshold to be raised to £100,000, describing the £85,000 figure as “a straightjacket to firms eager to expand.” In another of his announcements to help small businesses, Mr Hunt said £200m would be spent to extend the Recovery Loan Scheme. The VAT threshold increase and the cuts to self-employed NICs deliv- ered by the chancellor were welcomed by the FSB, though it warned that firms still faced seri- ous challenges. The organisation’s pol- icy chair Tina McKen- zie said: “We welcome the increase in the VAT threshold as well as the cut to self-employed National Insurance Con- tributions (NICs). “Elsewhere, we were pleased to see a pack- age of small business support in the Budget documents, including commitments to make progress on the HMRC administrative burden and on the national roll-out of the Business Energy Advice Service, as well as extending the Recovery Loan Scheme under a new name – the Growth Guaran- tee Scheme. “Small firms are cru- cial for economic growth, and we were glad the chancellor has said that clearly from the des- patch box. “That said, many of those running businesses face serious challenges – not least through rapid hikes in labour and input costs – and many will have understand- ably hoped that there would be more measures announced that would help ease the tough decisions small employ- ers are having to make day-in day-out to keep their businesses going. “There’s still a real gap when it comes to the crunch small firms are facing – and the growth, jobs and economic secu- rity small businesses provide is not something the country can afford to risk. “While keeping the £5,000 Employment Allowance for the 10th year in a row is invalu- able, it should have been uprated to keep pace with the National Liv- ing Wage – especially if employer tax thresholds remain frozen. Gov- ernment must not be over-confident on jobs and hours in this eco- nomic environment.” CHANCELLOR Jer- emy Hunt unveiled significant property taxes changes in his Budget statement, aimed at stimulating the market. He announced both a capital gains tax cut and the abolition of tax relief on holiday lets. The higher capital gains tax (CGT) rate on residential property, currently at 28 per cent, will be reduced to 24 per cent in a boost for landlords. CGT on property sales is paid on non-per- manent residences such as buy-to-lets, second homes and holiday lets. Mr Hunt said both the Treasury and the OBR agreed that the move would actually increase tax revenues overall, as it would encourage more prop- erty sales. The CGT property rate will remain the A STOCKPORT busi- ness referral group is celebrating after generating £30mil- lion for its members since launch. BNI Pyramid, which currently meets every Friday morning at Bram- hall Golf Club, was set-up with 12 founding mem- bers in 2004. Celebrating its 20th anniversary this year, the group has supported more than 250 businesses since launch, represent- ing a wide spectrum of industry sectors, from architecture to finance, IT, HR, legal and a broad number of trades. The group is part of global organisation BNI, the world’s leading busi- ness referral organisation. With more than 318,000 members in 77 countries, it provides weekly networking meetings for groups of businesses, who follow a focused meeting agenda that enables them to use their combined network of contacts to find busi- ness opportunities and referrals for one another. Last year, its members in towns and cities across the UK and Ireland shared £538m of business Referral group celebrates £30m milestone between one-another. BNI Pyramid chapter president Martin Howe of Searchlight Finance, said: “We are incredibly proud to have reached this multi-million mile- stone as we celebrate our 20th year. “BNI has been shown to have a significant positive impact on the economies of the areas in which it operates, bring- ing together the SMEs that form the backbone of UK Plc, and helping them grow together. “A key value for BNI, so much so it’s a registered trademark, is Givers Gain, which reflects how our systems are entirely built on encouraging and facilitating an altruistic attitude to business – if you help me, I’ll want to help you. It’s an approach that has helped many thousands of people across the planet over the last 39 years to build businesses of their dreams, and we have several members in our own group who have been with us in the long-term and built up multi-mil- lion pound businesses. “The secret to mak- ing BNI work is having the right people with the right attitude in the group, so our doors are always open to businesses who are keen to grow by working with others, who might be interested in coming along to see what it’s all about.” Louise Eccles, BNI executive director for Greater Manches- ter East, Lancashire, Kirklees and Calderdale, said: “BNI Pyramid has a special place in my heart as I was one of those 12 founding members, way back at its launch 20 years ago. “It has been absolutely fantastic over that time to see the incredible impact BNI has in helping local businesses come together and work together for mutual success. “I have seen it change lives and can honestly say it has changed my own in so many positive ways. “BNI Pyramid’s mul- ti-million milestone is a prime example of the huge boost groups can provide to local economies and local communities.” Property tax changes aim to stimulate the market same for basic rate tax- payers at 18 per cent. In a statement follow- ing the announcement, the government said: “Cutting the 28 per cent rate of CGT to 24 per cent is expected to incentivise earlier disposals of second homes, buy-to-let property and other residential property where accrued gains do not fully benefit from Private Residence Relief (PRR). “This will generate more transactions in the property market, benefit- ting those looking to move home or get onto the prop- erty ladder.” Meanwhile, the furnished holiday lets (FHL) regime, which offers tax advantages to those who let out a prop- erty as a holiday home, will be abolished in April 2025. The chancellor will also remove multiple dwellings relief. Mr Hunt said FHLwas being scrapped because holiday lets reduce the availability of long-term rentals for people. Under the present rules, landlords can deduct the full cost of their mortgage interest payments from their rental income and poten- tially pay lower capital gains tax when they sell. Around 127,000 properties in the UK are registered under the FHL regime. In other Budget announcements, a new excise duty will be intro- duced on vaping products from October 2026. ‘Non-dom’ tax status will be abolished and replaced with a residen- cy-based system. And a new tax-free British Isa will be cre- ated as part of efforts to encourage more invest- ment in UK companies. In a statement the Treasury said: “The new £5,000 allowance, in addition to the exist- ing ISA allowance, will provide a new tax-free savings opportunity for people to invest in the UK, while supporting UK companies.” Easing the burden of VAT Alcohol freeze to back ‘the great British pub’ THE chancellor announced an extension to the freeze on alco- hol duty to February 2025 in the Budget, declaring that the gov- ernment was backing “the great British pub”. It is a move that has been welcomed and will benefit 38,000 pubs across the UK. However, there have also been vocal calls for more support for the hard-pressed hospitality sector. And there was widespread disap- pointment that Jeremy Hunt didn’t go further and reduce the industry’s VAT burden. He also had nothing to say about business rates. Emma McClarkin, chief executive of the British Beer and Pub Associ- ation, called the freeze good news for brewers, pubs and consumers, but has warned that the hospitality trade is on a “cliff edge”. She said: “This April brewers and pubs still face a £450million cliff edge of spiralling wage costs and business rates increases, particularly those pubs that are larger or food-led. “It is disappointing that the chan- cellor did not choose to go further with a cut duty, reduce VAT or cap the increase to the business rates multi- plier which would have helpedmitigate the huge cost of doing business. “Pressures on our sector remain acute with margins being squeezed to the point where we fear it is likely that a further 500-600 pubs are likely to close this year on top of the 530 that closed in 2023. “No government should turn a blind eye to the erosion of such an integral economic, social and cultural asset and it is vital that at the election the political parties commit to putting in place a fiscal and policy frame- work that will see our sector thrive for the long term and not continue to deteriorate”. She called on the government to look again at “urgentmeasures” tomake the cost of doing business more affordable.

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