With the final budget now delivered before the general election we look at the £2.5billion package outlined for small businesses and what this means for the small business owner.

Fuel Costs

With an expected increase over the year of 3p a litre on fuel this will hit most businesses including those that claim the 40p mileage. The gap between the 40p per mile and the actual cost of running motor vehicles will be further reduced and with no increase. The 40p rate per mile on the first 10,000 miles of business travel has been in place since 2002/03 tax year and has not changed since implementation.

Business Rates

It has been said that business rates will be cut from October 2010 and 345,000 businesses are set to benefit from either a reduction and or relief from business rates. This is welcome news since the deferment of increases in business rates offered last year is menial at best. We await further detail on this.

Annual Investment Allowance

While in principle an increase in the AIA from £50,000 & £100,000 sounds impressive its will mean very little for the majority of small businesses. The current £50,000 AIA limit is sufficient for investments in plant in any one year. It remains welcome news for those who are looking to make significant investments beyond £50,000 in any one year.

Capital Gains Tax

The entrepreneurs’ lifetime relief of £1 million has been increased to £2million. We hope that this is not reduced when the economy (hopefully) starts to improve. The capital gains rate of 18% remains unchanged.

Funding For Small And Medium Businesses

Alistar Darling promised £2.5billion growth package to help small businesses to “promote innovation, invest in national infrastructure and key skills.”

Lloyds & RBS will be given a lending target of £94bn for small and medium sized businesses. We all know the government’s desire to borrow its way out of trouble and its budget deficit is evidence of this. Borrowing and gearing up your business does make financial sense and cheaper and more accessible funding is always good news in the hands of businesses that are viable. However cheaper finance and easy loans in the property market is what caused the current financial crisis. Simply handing out money for banks to suffer irrecoverable debts in the future can only be trouble and cause a double dip recession.

Ultimately there is no substitute for creating and sustaining a healthy economy where business owners can help themselves. As expected the budget failed to deliver on this and as expected this was a budget for political purposes and the ‘real’ budget will be delivered in the next pre budget report.

Changing Accountants is easier than most people realise and it is a simple 3 step process, simply :-

1.  Provide us with your previous accountants details.
2.  We make a formal request for clearance and historic records
3.  Your records are received and our agent details are registered with the relevant authorities.

In world of constant change being dynamic and responding to demands from your customers is key.  As a business owner you are constantly looking for ways to improve the goods or services you provide, ways to advertise and improve your supply chain.  However amongst all of this your accountant has remained firmly wedged in.  This is not necessarily a bad thing as having an accountant that knows and understands your business does reap rewards.

But what if your relationship with your accountant has run its course, what are the signs? do you :-

Run through the motions every year?
Feel your accountant is too busy for you?
You do not understand the services & the associated fees?
Feel that you accountant isn’t good value for money?

What do you do?  For many the barrier to change is a psychological one.  Most people do not want to upset the apple kart and incorrectly feel that making a change may result in more tax or an investigation.  This simply is not the case.

Fundamentally if you are unhappy then you should initiate a change because today’s accountants can offer a multitude of services.

Establishing new relations is a simple case of picking up the phone and calling other accountants, invite yourself for a meeting and then follow your instincts.  It is likely you will chose the accountant that you get on with and can explain things to you, one that takes time to answer your questions.

If you are in the process of thinking of changing your accountant but do not know where to start then why not try Gower Accountancy, you will receive a free consultation with absolutely no obligation.

As we struggle to come out of the UK recession, there will be an unprecedented amount of businesses seeing red when they come to draw their year end accounts.  This for some will be the first time in their recent business history due to the positive economic climate seen before the recession started to bite mid 2008.

Small business owners are cost conscious and astute when it comes to profitability.  Yet the sudden change and the ferocity of the recession have caught even the best out.

The climate suggests cash is king and for the time being Mr Brown has temporally extended relief so that businesses facing a loss can claim back tax paid in earlier years.  The claim for one year has now been extended to three years.  This facility applies to limited companies with losses in accounting periods ending between 24^th November 2008 and 23^rd November 2010.  For sole traders and partnerships it applies, in most cases, to periods ending between 6^th April 2008 and 5^th April 2010.

Naturally there is an order of events, you must claim in the year the losses arise against other income, only then it can be taken back to the preceding year and then up to £50,000 of any balance remaining to the two remaining years.

This is a welcome relief despite the cap of £50,000 and if you have losses exceeding the cap or expect losses to exceed the cap in the next financial year it would be wise to seek professional help as there ways to make this cap go a whole lot further.  Careful planning would be needed.

The main issue facing the business owners is whether to hold the losses for future years to set off against future profits or utilise the losses and carry them back.  If indeed you expect profits in future years to take you into the higher rate tax bands then preserving your losses will yield higher tax savings.

This area remains complex and in many instances it is highly dependant on personal circumstances.  This is a not a shoe that fits all and ultimately for many of the hard working small business owners cash will ultimately be king.

This article is written for information purposes only and in no way does it constitute advice on you personal circumstances.