Budget 2016 roundup for tech companies

Chancellor George Osborne delivered his Budget statement today. Here’s a roundup of the key points that are most relevant to small tech companies in the UK.

• Increases in funding for smaller UK businesses, including regional measures and support for high-growth businesses.

• Firms can use losses flexibly, which will help over 70,000 companies.

• Corporation tax will be cut from 20% to 17% by April 2020, benefiting over one million businesses.

• Sharing economy support – from 2017, there will be two new tax-free allowances worth £1,000 a year – one for selling goods or providing services, eg providing a lift share; and one for income from property you own, such as renting a driveway.

• Closure of a VAT loophole used by overseas internet merchandisers to help small businesses be more competitive.

• Crackdown on tax for larger corporations and reforms to business tax. Over the next five years, the government will raise nearly £8bn from large companies.

• Business rate relief will double, with the threshold rising from £6,000 to £15,000 and £18,000 to £51,000 at the higher rate.

• There will also be cuts on stamp duty for commercial transactions by small companies.

• A 5G strategy is to be created, plus an extra £4.5m is to be spent on broadband in the South West.

• From 2018, Class 2 National Insurance will be abolished, which is good news for the self-employed.

• From April 2016, the higher rate of Capital Gains Tax will be cut from 28% to 20% and the basic rate from 18% to 10%.

• Cutting business rates: April 2017, small businesses that occupy property with a rateable value of £12,000 or less will pay no business rates.This means 600,000 businesses will pay no rates. A further quarter of a million businesses will see their rates cut.

• Intention to work with the ‘New Bank Start-up Unit’ to promote the authorisation of more new banks (good news for FinTech companies).

The full budget speech can be found on the government website.