With the 2015 Election looming, the government is undoubtedly focused on economic growth & innovation, and this was demonstrated through yesterday’s Budget which included several commitments focused on UK SME’s, who remain the powerhouse for economic recovery.

Here are the top takeaways for UK SMEs, micro businesses & entrepreneurs:

Rise in Personal Allowance

The amount you can earn before tax is set to rise from £10,600 is 2015-16 to £10,800 in 2016-17 and £11,000 in 2017-18.

The upper tax threshold at which people start paying 40% income tax is also set to rise above inflation from £42,385 to £43,300 in 2017-18.

Review of Business Rates

A comprehensive review of Business Rates has been launched. The government also plans to pilot schemes that reward additional Business Rates growth.

The Budget states “the government wants to ensure that the tax system provides stable and sustainable revenues to fund public services in the least distortive way” and as such will conduct a broad review of business rates to ensure they are still appropriate within a 21st century economy. Local Authorities are also encouraged to use their business rates discretionary relief powers to support the sharing economy, which includes shared workspaces and maker spaces.

Improved access to finance and markets

The government aim to unlock the potential of the sharing economy, improve access to finance and boost exports. The Budget 2015 also announced funding for trade missions, focused on regional strengths.

The British Business Bank has published a request for proposals to pilot its Help to Grow scheme, which will make growth finance available to high potential firms. The Chancellor proposed £100 million in £500,000 to £2 million loans through the British Business Bank’s Help to Grow scheme.

Alongside this, the government will do more to inform SMEs about the support already available to them and their options for accessing finance.

Abolition of Class 2 National Insurance Contributions

Class 2 NICs will be abolished in the next Parliament and Class 4 will be reformed to introduce a new contributory benefit test. The details of this will be discussed later in the year.

Self Assessment tax return reforms

The government plans to “radically simplify tax administration by abolishing the annual tax return”, which will make tax simpler and enable tax and NICs to be collected through digital accounts instead of the annual self assessment.

Better education and support for SMEs

SMEs will also gain further information on how to access and use legal services, which will be included on the Citizens Advice and the GREAT business websites.

£4 million will be provided to extend the existing Skills Investment Fund for a further two years, providing match funding for training and development in film, television, visual effects, video games and animation. 

While a few of these new initiatives are helpful, the forthcoming Election looks to be very unpredictable and there is some nervousness around, owing to the unknown direction the UK's economy will turn.

Several of our customers are moving to invest in upgrading their businesses prior to May with a view to investing while the environment is unchanged. However the majority of micro businesses seems to be waiting until post election to see what is likely to happen.

This pattern is similar to that we experienced prior to the last General Election.