TEA trade entrepreneur Erica Moore found yesterday’s Budget was a bitter pill to swallow after hoping the Chancellor would provide meaningful help for small firms.
“He started off saying he wanted the UK to be the best place in the world to start to grow a business, but he has got a funny way of trying to do that,” she said.
Ms Moore owns the Edinburgh-based eteaket business, which recently opened a retail outlet close to the cafe it runs in the centre of the city. This has involved hefty investment at a time when the company’s bills have been increasing rapidly. The fall in the pound following the Brexit vote has pushed up the cost of imports, while the introduction of the National Living Wage and the pensions auto-enrolment scheme have made it more expensive to employ people. However, Ms Moore hopes to take on more staff in addition to the 14 Eteaket has.
Against that backdrop she said the best thing the Chancellor could do was make it cheaper and easier to employ people, but she felt nothing in The Budget provided help on that front.
Ms Moore was furious about the decision to increase the Class 4 National Insurance contribution rate at the same time as cutting the amount owners can take out of firms as tax-free dividends. Both measures will leave her with less money to invest in a business that she took a big risk starting after a successful law career. “It just makes it harder for us to grow and for other businesses to start up,” she complained.
Cuts in corporation tax, which were already in the pipeline, will only provide limited help.
To cap it all, Ms Moore will not benefit from what was seen as the main measure to help small firms that was included in yesterday’s Budget. Businesses that have turnover below the VAT threshold will be granted a one-year exemption from the requirement to file quarterly tax returns, which is due to take effect next year. The threshold will increase to £85,000 from £83,000 from April. eteaket’s £600,000 turnover means it will still have to get systems in place to enable it to comply with the new requirements from April 2018. eteaket may benefit from moves to simplify the way firms can claim research and development tax credits. It has launched new tea blends after working with food scientists at Queen Margaret University. But it may be some time before any changes are finalised.
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