How much could your business save?Find out now!
Or, you can call us on:0800 411 8830

Budget summer 2015: what UK SMEs need to know

Balancing the books was a key Tory campaign vow and both cuts and increased revenue are central to the latest budget. The implications for SMEs are significant.

The recurring theme of Chancellor George Osborne’s speech was switching Britain from a high-spending, high-welfare, low-wage economy, to the opposite. Here’s what will matter most to small to medium sized business owners:

Company taxes, earnings

A Conservative election promise not to raise income tax, National Insurance or VAT (or even to change the items that VAT is levied upon) rules out the easy sources of increased revenue. For small to medium sized business owners, no increase in VAT and a cut to corporation tax, to 19% in 2017 and 18% in 2020, will likely be well received – Osbourne said that this means “Britain is open for business”.

Other good news comes from an increase the annual investment allowance to £200,000 (instead of £25,000) to incentivise investment by small and medium sized businesses.

Potentially more troubling for employers is the new compulsory ‘living wage’ for over 25s starting at £7.20 next year, rising to 60% of median earnings by 2020.

Personal taxes

For personal incomes, the higher-rate tax threshold (when the 40p rate of income tax kicks in) will grow from £42,385 to £43,000 next year. The tax-free personal allowance will increase from £10,800, to £11,000 from April 2016, and to £12,500 by 2020/21 (so 30 hours a week on the minimum wage means no income tax).

Some business owners may be encouraged by the replacement of dividend tax credit with a new tax-free allowance of £5,000 on dividend income with higher taxes imposed on dividend income beyond that. Dividend tax rates will be set at 7.5%, 32.5% and 38.1%.

In a bid to both blunt criticism of being the ‘party of the privileged’ and to increase revenue, the Tory manifesto vowed to raise £7.2 billion from tax avoidance and evasion with the HMRC budget to be increased by £750 million. While the majority of these measures are to be aimed at “the rich”, SMEs with unusual/irregular tax affairs should think carefully about their accounting processes.

A vow to increase the inheritance tax threshold from 6 April 2017 from £325,000 per person with an extra £175,000 for property has proven popular among those that have seen the value of their houses soar. This will be balanced by restriction of tax relief on pensions for those earning more than £150,000 a year, with the lifetime allowance for relief dropped to £1 million. Annual tax relief on pension contributions is to be limited to £10,000 a year.


A consultation on whether the national six-hour limit on Sunday should cease, with local authorities and/or mayors now deciding how long shops can stay open. For most SME retailers, the situation will remain the same: shops covering less than 280 square metres (3,000 sq ft) will continue to be allowed to open all day.


Reforms to the energy market were conspicuously absent, although a recent Competition and Markets Authority report made some compelling observations. Nevertheless, business electricity and gas bills remain a nagging concern for many company owners. As experts in the SME business energy market, offers an obligation-free quote in minutes and can switch you to a new supplier in less than half an hour. Fill in the form at the top right of this page or give us a call on 0330 0100 251 to find out why we are the top-rated business compare and switch provider.

Related Articles


Very Clever Commuting Hacks

It’s easy to focus on the downsides of a long commute. The average UK commuter spends 58 minutes every ...

Read More
will innovative jam boost the economy

Will ‘innovative jam’ boost the UK economy?

It’s the economic equivalent of Union Jack bunting. Today, in a move surely masterminded by the Great Briti...

Read More
how to get more customers from your website

5 ways to get more customers from your website

What do you do if you have a site but it's just not generating a profit? 5 actionable steps to get more custom...

Read More
Excellent, 9.4 / 10

Competent and courteous service.

"Marie was knowledgeable and helpful. I feel able to recommend the service given without reservation. David Slesenger"

This review was posted by David Slesenger on the 16th of August 2016

Good service

"Nadia was very helpful"

This review was posted by Robin on the 16th of August 2016

Excellent Customer Service *****

"Jonathan Burgess is an asset to Switch My Business. He made me feel at ease and was more than helpful at all times. He made regular contact and guided me through the whole process which made switching a breeze. I just wish there were more customer service advisers like Jonathon whose friendly and happy demeanour make your day a much nicer one. Well done Switch my business and more importantly thank you Jonathon for all your hard work! Maria Owen Lodgecrest"

This review was posted by Maria Owen on the 17th of August 2016


"I totally agree with a customer maria owen,Jonathan Burgess was such a pleasure dealing with and is truly a asset to the company, he made it very easy to switch my electricity companies, Jonathan Burgess was very helpful, easy to talk to it was like talking to a friend not just a customer adviser. I would definitely recommend switchmybusiness and try get hold off Jonathan Burgess if possible and have the same excellent service as I did. Rajan Shanan"

This review was posted by Rajan Shanan on the 19th of August 2016

Excellent and very helpful

"Arron who dealt with my switch of energy and gas has been a huge help and extremely efficienct and easy to deal with. Despite British Gas throwing obstacles in the way at every turn he has doggedly stuck to his task and saved the day. Thanks Arron."

This review was posted by Rod Pryce-Jones on the 19th of August 2016