What the 2014 Budget means for business

The UK’s businesses received a boost today as the Chancellor George Osborne announced his 2014 Budget, with numerous schemes introduced to bolster their growth.

The Budget contained an overarching sense of optimism as Osborne told MPs that Britain's economy is growing faster than any other advanced country, with a revised growth forecast of 2.7 per cent for 2014. What's more, the Government received a pre-Budget boost as unemployment figures for the three months to January dropped by 63,000 to 2.33 million, according to the Office for National Statistics.

And so, making his fifth Budget announcement, the penultimate before next year’s election, Osborne outlined several decisions that ought to help businesses benefit from these green shoots of recovery and continue their upward trajectory. First and foremost, the annual 100 per cent tax allowance for investment has been doubled to £500,000.

Osborne said this was an important part of his party’s long-term plans. He said: “Almost every business across Britain will pay no upfront tax when they invest in the future.

“It costs £2 billion in the short term – so when we say: we’re going to get Britain investing; when we say we’re going to back growth around the country - we mean it.”

Another key development was that the Chancellor revealed: “In just two weeks corporation tax will be down to 21 per cent [from 28 per cent when they came to power], high street stores will get £1,000 off their rates, and every business in the country will get the Employment Allowance – a £2,000 cash-back on jobs.”

Going on, Osborne explained that the Government plans to overhaul the UK Export Finance’s (UKEF) direct lending programme by doubling available funding to £3 billion and cutting interest rates to the lowest permitted levels to provide “competitive financing” in order to help UK companies win international trade contracts and expand overseas.

He also stated that both the Seed Enterprise Investment Scheme (SEIS) and the capital gains tax 50 per cent reinvestment relief would be made permanent. Furthermore, to support start-ups and young companies, the government will raise the rate of the R&D tax credit payable to loss making SMEs from 11 per cent to 14.5 per cent as of April 2014.

Furthermore, Osborne announced that Government was “backing investment into social enterprises with a Social Investment Tax Relief at a rate of 30 per cent”.

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