The 2011 budget speech as expected held very few surprises, but did contain a few welcome changes, some of them of particular interest to independent contractors and those considering starting up a small business this year.
“Contracting through a Limited Company has steadily grown in popularity over the years and has become an even more attractive prospect for the 2011/2012 tax year, especially in light of the recent budget speech.” says Liam Collins of 1st Contact Accounting.
A few of the changes include the higher than expected reduction in corporation tax, as well as the additional relief for those investing in start-ups, under the Enterprise Allowance Scheme. The income tax threshold for investment will increase from 20% to 30% from the 6th of April – a measure which will further decrease the risk for investors.
Other measures include the decreasing corporation tax rates for small companies from 21% to 20%; a higher tax free allowance (increased by £1,000); and an increase in the mileage allowance from 40p to 45p.
Prime Minister David Cameron has been actively encouraging entrepreneurs to lead the way in the economic recovery by making changes that will allow the UK to become one of the easiest and cheapest places to run a company. Cameron recently said:
“We need to see a country where new businesses are starting up on every street, in every town; where entrepreneurs are everywhere.”
Plans are underway to expand the scope of the New Enterprise Allowance, which aims to create up to 40 000 new businesses by 2013.
For advice and information about setting up a Limited Company, visit www.1stcontact-accounting.com or call 0808 141 1624 and speak to a qualified and friendly consultant about your own business aspirations!