What does the Budget mean for SMEs?
Our CEO, Martin Brown, shares his musings and thoughts about what we heard.
The headlines: Avoiding the notion of recession or certainly the technical definition of a recession, or inflation, hoping to see interest rates go down from the fourth quarter of this year into the first quarter of next. It’s certainly not the doom and gloom deep recession scenario that we were made to believe that we were going into, so good news for business.
Certainly, in the first quarter of this year, fourth quarter of last year, we have seen, across our portfolio, businesses performing really well. SMEs getting on the front foot with their growth and funding and exit journeys.
Corporation tax is increasing, so 19% to 25%, a little bit below the radar yesterday, but that’s absolutely happening. So, that is a significant impact for us as business owners. There’s some protection around capital expenditure, and some protection around R&D and the encouragement of R&D through R&D Tax Credits, a bit of a change that is likely to play itself out in the coming weeks and months.
There was also talk of investment zones. This notion of the levelling up agenda, hitting certain parts of the country. We didn’t see any mention around business asset disposal reliefs, that notion of a million pound allowance at the 10% rate still currently holds. So, all in all, some interesting information passed on by the Chancellor, down to us now as to what we do with that.
The pension announcement was a curious one that move from a £40k to a £60k annual allowance and the complete removal of the lifetime allowance. You will need to talk to your financial adviser about that to work out if it really is something that’s good and positive for you. What we would say is as a business leader, the ability to be able to put more money into a tax efficient wrapper can’t be a bad thing.
Our advice then is take a step back. Where are we as SME business leaders, our encouragement is very simple. Take control of your business, and your business journey. Understand what these budget and budget changes mean for you. Clearly, they are going to change as we go forward. The elephants are always here for you, please get in touch if you have any questions about planning to grow your business, preparing your business for sale, or if you need assistance to turn your business around.
We look forward to taking you on your growth, funding and perhaps exit journey.