Cosmetic Courses: The Budget 2015 - How to run your business...

The Chancellor has just delivered his first Budget of this government – and as usual, some will benefit and others lose out. But if you run your own business, how will you be affected by his red box revelations?

Essentially, how the Budget is likely to affect you depends on how your business is structured, and how established you are.

By and large, this Budget focused on two kinds of business – very large companies and successful smaller businesses that are ready to grow.

Some commentators were disappointed by the lack of new incentives for entrepreneurs looking to launch solo start-up businesses. But if you already run your own business and are doing well, there are measures that may help you. 

Let’s take a look at some of the major announcements and what they could mean for you.

Tax

The Chancellor announced the rate of corporation tax would fall from its current 20% to 19% in 2017, and then further still to 18% in 2020 – giving the UK the lowest corporation tax rate in the G20.

Great news if you run your own business – but only under certain circumstances.

If you’re a limited company making significant profits, you’re likely to benefit from the drop in corporation tax. But if you’re a sole trader or partnership, a start-up or small limited company that only generates a marginal profit, the change probably won’t affect you.

Other new tax measures may make life easier, and save you time – if not money!  

The Office for Tax Simplification has been given more powers to cut red tape, and will be putting forward its recommendations for a reformed tax system as part of the 2016 Finance Bill.

And the dreaded tax return, having already been moved online, will see further digitisation over the next few years. 

Employees

If you run your own business, you may already have, or be looking to take on, members of staff.

The National Living Wage will come into effect in April 2016, requiring all employees to be paid a new minimum wage of £7.20 per hour, rising to £9 per hour by 2020. 

This will mainly impact small businesses with a significant number of employees earning the minimum wage. But if that applies to you, there’s also a measure that will help offset your increased wage bill. 

The national insurance employment allowance will be raised by 50%, from £2,000 to £3,000. Only you and your accountant will know whether this completely offsets the impact of the increased minimum wage on your business, but every little helps.

Investment

One of the most crucial allowances when you run your own business and are looking to grow is the Annual Investment Allowance – and there’s good and bad news on that front.

The allowance lets small and medium-sized firms make tax-deductible investments in equipment and machinery to help fuel their growth.

It currently stands at £500,000, but was set to be cut to just £25,000 from 1st January 2016 – though many were calling for an increase on the £500,000.

Mr Osborne has decided the new allowance will be £200,000. So, not cut as much as it was going to be, but still by a significant amount.

Finance

Another important area if you run your own business and are looking to grow is access to finance. And two new measures announced by the Chancellor will make it much easier to secure business loans.

First, the UK’s major banks will have to share credit information on small businesses with other lenders, and must share details of firms they reject for finance with online platforms that can pair them up with other finance providers.

In addition, the British Business Bank will look to increase and diversify the supply of finance available – with plans to make £10bn available by 2019.

So there you have it. Not quite as exciting for business as it could have been, but some incentives nonetheless. Perhaps the biggest incentive of all being that to benefit from many of the measures, your business needs to grow! 

Looking to run your own business?

Cosmetic Courses offer expert training for medical professionals looking to enter the aesthetics industry. Our ongoing support network provides comprehensive advice and resources to help you set up and run your own business. For information on our aesthetic training courses, please contact the team on 01844 318317 or email [email protected].