Osborne announces Budget for 'hard workers'

Chancellor George Osborne this week announced a Budget for “people who aspire to work hard and get on”, with some welcome news for entrepreneurs.

One of the most beneficial announcements in the document, revealed on Wednesday (20 March), was the extension of the Seed Enterprise Investment Scheme (SEIS). Essentially a Capital Gains Tax (CGT) holiday, the SEIS is now due to continue into the 2013-14 tax year.

The scheme will see HMRC offer £500 back on the tax return of someone who invests £1,000. But for those considering selling their business, there are some even greater tax cuts available. While a £1,000 investment in a SEIS-eligible start-up, for example, could attract 64 per cent tax relief just for making the investment.

Jeff Lynn, chief executive of SEIS promoter Seedrs, explained the system in more detail to Interactive Investor: “If you sell at a profit, you pay no CGT. And if you sell at a loss, you can claim loss relief, which means that if you are a 45 per cent rate taxpayer, you would be entitled to a further 22.5 per cent off your tax bill.”

While the Chancellor made no secret of the fact that there is a long way to go to return the economy to good health, the Budget did bring with it a number of other positive developments for the business world. The Corporation Tax cut to 20 per cent has been welcomed, although it won't come into effect until 2015. The drop will give the country the lowest rate within the G20 countries and put the UK in a good place to attract overseas businesses and investors.

Companies looking to attract some of the best talent will also welcome the measures introduced to reward hard workers. A £10,000 tax free allowance is set to come into force from next year, which is one year earlier than had been planned by the Chancellor and the Government.

Those looking to buy a property in particular welcomed Osborne's announcement that a new mortgage guarantee is to come into force, designed to support people who cannot afford a big deposit. This will be offered to everyone looking to move up the property ladder and appears to be designed to stimulate the property market rather than solely to help those at the bottom of the ladder to get on board.

It's going to be a long slow process to recovery, but the Chancellor's focus on entrepreneurs and regional growth through SMEs is at least a step in the right direction.

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