CORPORATE BORROWING
THE POLICY: Credit Data Sharing
Osborne promises to create greater competition in the lending market to make borrowing easier for small to medium-sized businesses.
Details
Under new legislation, regulations will impose a duty on designated banks to provide specified information about their small to medium-sized corporate customers to designated Credit Reference Agencies. These Credit Reference Agencies will then be under a duty to provide such information to other, smaller lenders who may be able to offer rates that are more competitive.
Note
Small to medium-sized businesses will be able to seek loans from a broader range of lenders, on potentially better terms.
ENTERPRISE ZONES
THE POLICY: Creation of New Enterprise Zones
Osborne promises to create 26 new enterprise zones.
Details
The good news continues in the form of the expansion of the Government’s Enterprise Zones in which businesses can utilise up to 100% business rate discount worth up to £275,000 per business over a five-year period.
Note
The Enterprise Zones offer access to numerous benefits for growing businesses and are helping to attract more foreign investment into the country, creating jobs and long term, sustainable businesses throughout England.
ENTREPRENEURS’ RELIEF
THE POLICY: Unaltered
Osborne promises not to alter Entrepreneurs’ Relief. This represents a huge potential saving to outgoing business investors.
Details
The Financial Times predicted that Entrepreneurs’ Relief was vulnerable to reform in the Autumn Statement but their fears were unfounded… for the moment.
With benefits of Entrepreneurs’ Relief, worth £3bn a year by the latest estimates, mostly accruing to just a few thousand business owners, it is an available relief that can save investors in small to medium-sized businesses a great deal of money.
Note
Tax professionals are making the case that this is not the end of Osbourne’s cutting of tax relief and warn Entrepreneurs’ Relief may be next on the chopping block. Seeking continuing advice on this issue will be important to capitalise on this relief while it is still available.
SMALL BUSINESS RATE RELIEF
THE POLICY: 12-Month Extension
12-month extension to the doubling of small business rate relief in England.
Details
No change from the previous period.
Note
This is welcome news for start-ups and small businesses throughout the country providing useful discounts to growing businesses.
BUY-TO-LET LANDLORDS
THE POLICY: Increase Stamp Duty Land Tax (SDLT)
Osborne promises to cut down on buy-to-let landlords to allow for greater opportunities for families to enter the property market.
Details
From 1 April 2016, an extra 3% will apply to the current SDLT rate on any additional residential property bought for over £40,000.
Therefore, the following SDLT rates will apply to such acquisitions:
£40,001 – £125,000 3%
£125,001 – £250,000 5%
£250,001 – £925,000 8%
£925,001 – £1.5m 13%
£1.5m + 15%
Purchasers will be obliged to opt in by declaring that the property will not be their primary residence.
Note
The increased rates will not apply to corporate or fund purchasers making significant investments in residential property. A government consultation will consider whether the ownership of more than 15 residential properties is appropriate as a “significant investment” for these purposes.
