How does the Budget affect you?
The Chancellor’s latest budget has been largely praised by small businesses organisations.
The main positive point is the cutting of business rates for all rate payers from April 2017. Those in premises with a rateable value (the building’s open market rental value) of £12,000 or less will pay no business rates at all – doubling the value previously required to be eligible for 100% relief, which is currently £6,000 or less. There will also be a tapered rate of relief on properties worth up to £15,000.
Part-time therapists who fit work in around their families will welcome the increase in Personal Allowance from £10,600 to £11,500, which will also be introduced from April 2017. The higher income tax bracket will be increased to £45,000 in April 2017.
Self-employed therapists who pay Class 2 National Insurance contributions (£2.80 per week for profits of £5,965 or over per year) will no longer have to do so from April 2018. They will only be required to pay Class 4 NIC – 9% on profits between £8,060 - £42,385 2% on profits over £42,385. This will be reformed so people can continue to build benefit entitlement to things like the state pension, as with Class 2 currently.
Particularly relevant for mobile therapists, The Chancellor also announced another freeze on fuel duty from April 2016, predicted to save the “typical” motorist £75 a year. Those considering buying their first salon or setting up an additional location should be aware that stamp duty on freehold commercial property and leasehold premium transactions will be calculated differently from today (March 17). Rates will now apply to the value of the property over each tax band rather than to the whole transaction value.
Paul Curry, president of the National Hairdressers’ Federation, which also represents beauty salons, commented: “The NHF has long been calling for small business rate relief to be made permanent in this way, and so this is excellent news for salons and the high street in general.
“Anything that reduces the tax burden on profitable businesses and encourages them to invest and grow can only be a good thing, so the chancellor’s continuing commitment to reducing corporation tax is welcome," he added.
Spas and salons with a focus on wellness may also welcome the announcement of a "sugar tax", which will be introduced on soft drinks from 2018 and is expected to raise £520m for the UK economy.