George Osborne delivered his final Budget before the UK’s general election, with an upbeat message of economic growth.

According to the Chancellor of the Exchequer, the UK enjoyed the fastest growth in the G7 in 2014. Looking forward, Mr. Osborne has forecast that debt will fall as a share of GDP from 2015-2016, a year earlier than originally forecast in his Autumn Statement.

Taxes, duties and levies

Perhaps the biggest sea change in the Budget was the announcement that the annual tax return is to be abolished. Millions of individuals will have the information HMRC needs automatically uploaded into new digital tax accounts. Businesses will feel like they are paying a simple, single business tax – and again, for most, the information needed will be automatically received.

Tax-free personal allowance will increase from its current rate of £10,600 (€14,650) to £10,800 (€14,930) in 2016-17 and £11,000 (€15,210) the year after.

The increases to the personal allowance from £6,475 (€8,950) in 2010, to £11,000 (€15,210) in 2017-18 will save a typical taxpayer £905 (€1,250).

The 2015 Budget also confirmed that fuel duty will be frozen again; since 2011, the government has cut and frozen fuel duty, saving a typical motorist a total of £675 (€930) by the end of 2015-16.

Duty on alcoholic beverages are also being frozen - there will be a 1% duty cut off a pint, a 2% cut for spirits and most ciders, and a freeze on duty on wine.

The government is also increasing the rate of the bank levy (one of the taxes that banks pay) from 1 April 2015. This will raise an additional £900 million (€1.2 billion) a year.

Oil & Gas sector support

To encourage further investment in the North Sea, the government will introduce a new Investment Allowance and reduce the supplementary tax charge on oil and gas companies further, from 30% to 20%, from 1 January 2015.

The rate of Petroleum Revenue Tax paid on older oil and gas fields will also be reduced from 50% to 35%.

These changes are expected to increase oil production by around 15% by 2019, and drive £4 billion (€5.5 billion) of new investment over the next five years.

David Postings, CEO of Bibby Financial Services, considers the risk of forgetting SMEs in this year’s UK Budget and looks at how the Small Business Bill’s accession into law later this year could affect funding for SMEs and their general operating environment

At the start of last year, 99% of all private sector businesses in the UK were SMEs, accounting for 47% of private sector employment and 33% of private sector turnover.

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For many SMEs, business rates are a significant proportion of their monthly expenditure, while suppliers delaying their deliveries or customers paying later than agreed can tip the financial scales into the red. Against this finely balanced operating environment, political manoeuvrings are often watched closely by many SMEs and on the run up to the general election in May many will pay close attention to see how the winning party’s manifesto will affect them.

During an election year, however, it is easy to forget about the Budget and before this year’s electioneering fully takes hold, it is important that our gaze remains firmly on the Chancellor of the Exchequer’s announcement later this month.

The Budget

From the Autumn Statement in December, we know there will be some key changes for business. Measures proposed to make it cheaper to hire apprentices, and doubling small business rate relief for another year, will surely see operating costs reduce for many businesses.

A £45 million (€61 million) boost to help SMEs to export goods and services beyond the crisis-ridden Eurozone was announced, encouraging businesses to target fast-growing economies in Asia, Africa and South America. Though a welcome move, whether this will be enough for the Government to stay on track to meet its export target of £1 trillion by 2020, remains to be seen.

An extension to the Funding for Lending scheme – which will see the scheme continue until January 2016 – and additional support for the British Business Bank have both been proposed and these measures aim to provide greater access to funding for many SMEs.

But is this a case of too little too late for the current government?...

Read the full feature in the March 2015 edition of Finance Monthly Magazine