Budget offers support to small businesses
Today's Budget announcement brought mixed blessings for small businesses such as salons and spas, which may be impacted by changes in the pre-tax earnings threshold, National Minimum Wage, and business loan rates, as well as increased access to funding for start-ups. In his address, the chancellor George Osborne announced that low-income earners would be exempt from paying tax on earnings up to £9,205 from April 2013, an increase of £1,100. This is set to take the coalition closer to its 2014 goal of a £10,000 allowance and will particularly help part-time therapists. For some salon owners, payroll costs will not rise as much as feared because the increase to National Minimum Wage will rise at a rate below that of inflation, increasing 11p to £6.19 for adults in October. It will not increase at all for 16 to 21-year-olds. The Government said the move will protect jobs and reduce redundancies for employers who cannot afford wage rises. Osborne also said there will be a 'record number' of apprenticeships and loans to help start-up business, which demonstrates the Government's plans to support more vocational training sectors including beauty therapy. The announcement of a new National Loan Scheme aims to reduce the cost of borrowing to small businesses by around 1%. However, this will not help the many salons and spas that have been unable to access from the banks at all during recession. A reform of the Enterprise Management Incentive scheme will help start-ups recruit and retain new staff. The scheme subsidises wages of talented new employees who are likely to help the employer grow their business. The Government said it will double the grant available to £250,000. The 1% cut in corporation tax will be good news for some but will have a greater impact on the largest businesses.