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With the announcement of the 2012 budget, what does this mean for the small business?
With the change in corporation tax being reduced from 26% to 24% in April 2012 it is definitely a step in the right direction and if the Treasury’s proposals go to plan it should eventually reach a low 20%. This is fantastic for encouraging new business to move to the UK and relieving the tax burden on an existing business, however for small businesses with profits not exceeding £300,000, you currently only pay 20% and will not see any benefit.

In addition to this with the increase in business rates, smaller companies are expected to feel the strain, with no change to employer’s national insurance contribution to help ease the burden of employing people it all adds up.

It’s not all bad news, from April 2013 companies with revenue of up to £77,000 are now expected to be able to change the way they calculate their tax payments from the cash they receive and not the amounts invoiced, this will greatly benefit cash flow. If successful the Treasury will consider raising this to £150,000 seeing many more businesses benefit.

For any questions please don’t hesitate to contact us at Haxton.

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