Last week on Commercial Domestic Investigations we discussed The Budget 2016 and the positives and negatives that it will bring for UK SMEs.

A week later, company owners and financers have weighed in on the implications and benefits of The Budget, with varying views.

Good – but only on first glance

CEO of FreeAgent, Ed Molyneux, says that on first glance there seems to be some good news for small businesses in this year’s Budget. With business rate Relief doubled, cuts made to Capital Gains Tax and Corporate Stamp Duty and the government creating two new £1,000 allowances for property and trading income, these are all positive steps. However, he also adds that The Budget could be a bit of a missed opportunity when it comes to SME 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,” Molyneux says.

There’s also little for contractors to get excited about either, he adds. “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.”

Excellent outcome

Some SME owners, such as Joe Stelzer of Cavendish Corporate Finance, are more upbeat about The Budget on a whole. Stelzer believes it represents an excellent outcome for entrepreneurs and investors in private companies.

“Not only was entrepreneurs relief left intact (when some had feared a cut) but the reduction in the higher rate of CGT from 28 per cent to 20 per cent will assist entrepreneurs with gains in excess of the £10 million entrepreneur’s relief allowance.

“The Budget also provides considerable encouragement to invest in new business ventures through the new 10 per cent rate on long-term investment in unlisted companies,” Stelzer adds.

“The relief is subject to a £10 million lifetime allowance and a minimum three-year hold period, but will be particularly significant for entrepreneurs looking to attract investment in enterprises which don’t qualify for EIS/SEIS relief. The advantageous changes in CGT rates make this an ideal time for business owners to be considering a sale.”

It’s safe to say that the outcome of The Budget won’t please all SMEs, but there are some steps in the right direction and hopefully more to come in the future to support UK SMEs.

About Commercial Domestic Investigations

Commercial Domestic Investigations are regarded within the debt collection and credit control industry as one of the best credit management companies in the UK. Established in 1988 to support and service all sizes of companies in the field of Credit Management.

Commercial Domestic Investigations have recently featured in the press in The Guardian. To keep up to date with the latest debt collection news make sure to follow Commercial Domestic Investigations on twitter, LinkedIn and Google+.

We now boast a national client base in excess of 30,000 companies. Commercial Domestic Investigations has grown by listening to clients’ requirements and adapting our services to meet all companies’ needs from Sole Traders, SMES, Ltd and Plus. Please contact us on 08444 159200 for more information.

The post Budget 2016: SME Reaction appeared first on Commercial Domestic Investigations.