Budget 2015 – What Entrepreneurial Businesses Should Know
Budget 2015 – What you need to know
George Osborne has just finished delivering his second Budget of 2015. Major changes have been announced to a wide range of policies that are of key importance to entrepreneurial business leaders. Among the most notable are those to National Insurance, apprenticeships and the minimum wage. In this Budget 2015 review we’ll be taking a closer look at these topics.
The National Living Wage
One of the biggest Budget surprises was the announcement of the National Living Wage. This will replace the minimum wage and will be set at £7.20 an hour for over-25s when it is introduced next year. It will then gradually increase to £9 an hour by 2020. No details have been announced on changes to the Minimum Wage for workers under 25. It is expected that the minimum wage for these age groups will remain the same.
These changes will cause an increase in cost for some businesses. The government is also taking some steps steps to offset this by cutting the amount of tax and NI that most employers have to pay. This includes a further cut in corporation tax to 18% by 2019 and changes to employers’ NI contributions.
To offset the cost of the new National Living Wage for small businesses the government has announced changes to Employers’ National Insurance Relief. This will be increased from £2,000 to £3,000 a year in 2016. This means that businesses will not have to pay the first £3,000 of their Employers’ National Insurance contributions. The government expects that this will exempt 90,000 businesses from paying Employers’ NI altogether by the end of 2017.
The UK budget 2015 includes plans to create 3 million new apprenticeships by May 2020. These will be funded by a new levy on large UK employers (the full details on how this will operate have not yet been revealed). This funding will then be distributed to employers who run apprenticeship schemes using a new online voucher system. The scheme will be up and running by the end of 2016.
MOTs and Driving
One unexpected change in the budget was Osborne’s announcement that cars will only need to undergo an MOT test when they are 4 years old rather than 3 years as at present. Vehicle Excise Duty will also be reformed to pay for a number of new road building schemes in the north of England.
The UK Budget will result in some major changes to the way businesses operate. You can find full details on the Government’s 2015 Budget website.