Posts Tagged ‘fuel’
Following this week’s Emergency Budget, by the new Chancellor, George Osbourne, here’s what our Financial Controller, Ged Taylor, has to say about the potential affects on SMEs.
Raising the threshold that companies start paying national insurance by £21 per week together with scrapping the previous Government’s planned increase in N.I. contributions, makes it easier for SMEs to employ more staff.
The cut in Corporation Tax by 1% for each of the next four years, taking the rate from 28% down to 24% will enable companies such as Shred Easy to re-invest more in growing the business and creating employment opportunities.
The high price of fuel is a major concern for many SMEs including ourselves. We welcome the fact that there are no further increases in fuel duty planned, although the increase in VAT in January 2011 will have an effect. It is hoped that this budget will signal a serious attempt to reduce the country’s deficit and lead to a strengthening of the Sterling against the U.S. dollar, which would push the price of fuel downwards.
Value Added Tax
It was inevitable that there had to be a major tax increase somewhere. The increase in VAT to 20% from January 2011 brings us in to line with our European neighbours. By increasing taxation on spending rather than earnings, this does not have a negative effect on encouraging people to work and generate wealth.
The fact that the increase comes after Christmas should ensure that the impact on the economic recovery is mitigated.
Whilst the increase may have some effect on our trading we recognise this as a necessary evil that will go some way towards reducing the massive deficit.
Tackling the deficit
Hopefully the public sector spending cuts that have been announced together with welfare benefit cuts, the levy on the banks and the VAT increase will give the international community confidence in our country. We would not wish to go the way of Greece and Spain with reduced credit ratings, forced cuts and subsequent higher borrowing costs.