A budget for local businesses

Chloe Smith MP: We have a thriving economy in our city. We are well known for being one of the top most prosperous shopping destinations in the UK, as well as a centre for tourism, whilst our industries are strong and innovative in finance, engineering, technology and the creative sector.  I believe it is businesses, particularly small businesses, who support this growth and create the jobs here in Norwich.

As part of the recent Budget, business rates have been reformed so 600,000 small businesses will no longer pay business rates at all. The new, permanent threshold for small business rate relief will rise from £6,000 to £15,000. The threshold for the higher rate will rise from £18,000 to £51,000, taking 250,000 smaller properties out of the higher rate. Indexation will switch from RPI to CPI, which is a tax cut every year from 2020. 

Corporation tax will also be cut again – benefitting one million companies in Britain. When the Conservatives came to power in 2010 Corporation Tax was 28%. The Government cut it to 20% in the last Parliament and in the summer set out a plan to cut it to 18%. The Chancellor has decided to go even further, with the rate set to fall to 17% in 2020. Following the Budget, the Shadow Chancellor said on the BBC that he would not have done this, worrying given the irreplaceable role businesses play in ensuring a flourishing local economy.

Cutting Capital Gains Tax will boost enterprise and encourage more people to invest in our businesses. From the 6th of April this year, the basic rate of Capital Gains Tax will be cut to 10% and the higher rate to 20%. Reforming Stamp Duty on commercial properties will make it easier for small firms who want to upgrade to a bigger premises.

The Chancellor also published his plan to make Britain’s business tax system fit for the future. Time and again I agree with constituents who say they are fed up with big companies and wealthy individuals not coughing up their fair share of tax. The reforms proposed in this plan will deliver a low tax regime to attract investment in Britain but ensure companies pay fair taxes here too. They will level the playing field, which has been tilted against our small firms, with interest deductibility restricted for the largest companies at 30% of UK earnings, new hybrid mismatch rules to stop the complex structures that allowed multinationals to avoid paying tax and a strengthened withholding tax on the royalty payments that allowed some firms to shift money to tax havens. 

As Member of Parliament for Norwich North I am asking local businesses in Norwich for their views on the budget and what more the Government can do to support our local economy. I also spoke in Parliament about the need for local authorities to prioritise local small and medium sized enterprises in their procurement practices, and am encouraging Norwich City Council to take the lead in doing so.