The big news last week was the Budget. We look at the key changes that will affect your business.

Firstly, in other news, there’s worrying reports that most small businesses aren’t ready for data breaches and Sainsbury’s faces legal action over equal pay.

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Sainsbury’s faces legal action over equal pay

The case hinges on determining whether jobs in stores are of equal value to higher-paid jobs in male-dominated distribution centres.

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Key dates for your diary

No significant dates this week.

How the Budget will affect your business

The emergency or summer Budget on 8 July was an opportunity for George Osbourne to set out the changes he will be introducing for the new Government. Here are the key areas that will affect small businesses:

Pay

• A new National Living Wage comes into force next April and is compulsory for working people aged 25 and over. It will start at £7.20 in April 2016 and will rise to £9 per hour by 2020.

Taxes

• Tax-free personal allowances will rise from £10,60 to £11,000 next year. The threshold will also rise in line with minimum wage.
• The threshold for the 40% rate will rise to £43,000 in 2016/17.
• A tax lock to stop increases to income tax, national insurance or VAT will be legislated for in the coming weeks.
• Corporation tax will be cut to 19% in 2017, dropping to 18% from 2020.
• The employment allowance will rise to £3,000 but companies where the director is the sole employee will no longer be able to claim.
• Insurance Premium Tax to increase from 6% to 9.5% as of 1st November 2015.

Dividends

• There will be a major overhaul of the way dividends are taxed. It will be replaced next year with a new tax-free allowance of £5,000 of dividend income for all taxpayers.
• The rates of dividend tax will be set at 7.5%, 32.5% and 38.1%.
• Dividends paid within pensions and ISAs will remain tax-free.

Apprenticeships

• The government has committed to 3,000 additional apprenticeship places.
• There will be a new apprenticeship levy on large companies to fund the new places.

Sunday Trading

• Counties and city mayors will have more power to set Sunday trading hours in their areas.

Annual Investment Allowance (AIA)

• This will be set at £200,000 a year from January 2016. The AIA allows companies to deduct the full value of certain items, such as equipment and machinery, from their profits before tax.

Enterprise Zones

• The chancellor announced a new round of Enterprise Zones for smaller towns. These areas are designed to create growth by allowing small businesses to pay reduced taxes and receive business support.

What businesses think

The reaction to the Budget has been cautious, with a poll by Enterprise Nation showing most businesses think it was fairly good. However, some businesses have expressed concerns about the cost of implementing the living wage.

What about you? How do you think the Budget will affect your business? Let us know in the discussions