While big businesses, first-time buyers and the public at large debate the pros and cons on a series of changes that will shape the development and growth of the UK economy, it is small and medium sized enterprises (SMEs) that are the big winner this year. In addition to supplementary charges and changes to commercial stamp duty, the annual threshold for small business tax relief will be raised from £6,000 to a maximum of £15,000, providing additional financial support for thousands of firms across the UK. Osbourne claims this would mean 600,000 businesses will now pay no rates and 250,000 will have their rates cuts from April 2017.
This means that overnight, thousands of firms will suddenly have a new treasure chest of unassigned capital to reinvest into developing internal infrastructure, product development, staff training and enhancing their sales and marketing processes. This will help to boost both human and fiscal productivity and sets up the potential to drive an exciting period of growth for budding, young businesses for the year ahead. This will be a major boost for the UK economy, and should not be overshadowed by the upcoming EU referendum, which lead to George Osborne downgrading the UK’s current growth prospects.
The big question is: How will businesses invest this newly found capital and what impact will it have on business services industry as a whole? My first reaction is that an office trip to the pub would be much in order, but on reflection (and thinking like a grown-up), this move by the Chancellor offers a unique opportunity for fast-growing small businesses to grow at a faster pace and expand into previously unexplored areas, which might have otherwise proved too costly an investment for those whose budget and vision seldom match up. It will make the economy, as a whole, more competitive, dynamic and start-up friendly, enabling SMEs, which currently make up nearly 50% of the economy, to drive innovation across the UK.
Whilst this change will look different for every business and every market, for us here at Limelight, it will help future proof our agency with further investment into training and the continual expansion of our communications suite. Helping to deliver the recognition that our clients and team deserve.
Read the full transcript of the budget on CityAM here