Certain announcements were put forward by the Chancellor in the 2009 Budget today which affect business. The Chancellor firstly stated that he expects to see economic growth returning by the end of 2009 and predicts growth of 1.25% and 3.5% in 2010 and 2011 respectively. Public borrowing is set to increase to £175bn in 2009 and decrease in subsequent years. Although inflation is expected to fall to around 1% by the end of 2009, the Retail Price Index may fall to -3% before moving back to zero in 2010.

Taxes
• Individuals with incomes over £150,000 per year will be taxed at 50% from April 2010, with a 42.5% rate for dividend income
• From the 2010-11 tax year, the basic personal allowance for income tax will be gradually reduced to nil for individuals with “adjusted net incomes” above £100,000
• From 2010-11 there will be increases to the trust rate and dividend trust rate to match those for income tax
• The measure includes new powers to vary the income tax rates for the charges that apply to registered pension schemes.

These changes replace the announcements made at the 2008 Pre-Budget Report. The reduction of personal allowances affects those with incomes over £100,000 and the new tax rate affects those with incomes over £150,000.

General Business Measures
• The standard rate of VAT will remain at 15% until December 2009, and return to 17.5% from 1st January 2010
• The VAT registration threshold will rise to £68,000 from 1st May 2009
• Enhanced loss relief announced in the 2008 Pre-Budget Report will be extended for an additional year
• HMRC’s Business Payment Support Service to be expanded for those businesses which are genuinely unable to pay their outstanding liability immediately or enter into a reasonable time to pay arrangement.
• Confirmation that businesses can spread payment of this year’s inflation up-rating to business rates over three years, as announced on 31 March 2009
• A ‘top-up’ trade credit insurance scheme to help businesses maintain their finances, in which Government will offer to match private sector trade credit insurance provision, for a temporary period, if insurers reduce cover to any UK business
• For a temporary period, a vehicle scrappage scheme, co-funded with industry, that will enable consumers who scrap vehicles older than ten years to replace them with a brand new vehicle at a discount of £2,000.
• A temporary increase in capital allowances to 40 per cent for one year, with effect from April 2009, to allow a higher proportion of private investment to be offset in that year against taxable profits
• A £750 million Strategic Investment Fund to support advanced industrial projects of strategic importance, of which a third of the funding will be earmarked for low carbon projects
• Implementation of a package of reforms to the taxation of foreign profits, including the introduction of an exemption for foreign dividends, supported by limited restrictions to the interest deduction rules.

The Bank of England has cut interest rates to a new all-time low of 0.5% and said it was now boosting the money supply to help revive the economy.

Interest rates have now been reduced six times since October, and the latest half a percentage point cut from January’s 1% had been expected.

The Bank said it would expand the amount of money in the system by £75bn in an attempt to boost bank lending. The idea is that if the amount of money in the system is boosted, commercial banks will find it easier to lend.

Quantitative easing is sometimes incorrectly referred to as printing money, but the Bank will not expand the supply of money by making new banknotes. Instead, it will buy assets - such as government securities (gilts) and corporate bonds. But as it will not borrow to fund the purchases, it is creating new money. Though this latest cut should help support business and consumer confidence, it it may not have a dramatic impact on the cost or availability of credit.

Dragons’ Den winner Levi Roots has launched a new competition offering cash prizes for the UK’s most dynamic family-run businesses.

The Reggae Reggae Sauce creator has agreed to head up the judging panel for Barclays’ Family Affair Awards.

There are approximately 3 million family-run firms operating in the UK, and Barclays Local Business wants to reward and celebrate their contribution to the nation’s economy.

Winning businesses across nine regions will each receive a £1,500 cash prize, with the overall champion scooping £5,500 in cash plus a year’s unlimited access to a Barclays Business Angel.

The competition is open to entries from any member (aged 18 and above) of a UK-based family-run business.

Potential contestants are asked to answer a few simple questions about their business, such as how it was started, how the family has worked to make it a success, and what are their future ambitions.

A judging panel will then reward the family firms that display the most significant degree of enterprise, success, and dynamism.

Urging families to enter the competition before the 31 March closing date, Levi Roots said:

“I’m looking to find the UK’s most exciting and enterprising family-run businesses in order to help them along the way. With the help of Barclays Local Business, we are going to inject a bit more spice into the prospects of these fantastic enterprises in 2009.”

For more information about the Family Affair Awards, visit the Barclays Local Business website

Up to £5,000 worth of business advice is on offer for the company that comes out on top to win the Nottinghamshire Business Awards 2009.

Firms from across the county are invited enter this year’s competition and showcase their successes, talents and products.

Now into their twenty-third year, the awards are free to enter. Although businesses from all sectors are welcome to put their name forward, the contest is primarily aimed at growth-orientated businesses developing new techniques, products and services.

Awards are up for grabs in the following categories:

Nottinghamshire Company of the Year.
Nottinghamshire Small Business of the Year.
Nottinghamshire Young Businessperson of the Year.
New Enterprise of the Year.
Business Innovation.
Winners in all sections will receive a commemorative trophy, but the entrant crowned the overall Nottinghamshire Company of the Year will also scoop £5,000 worth of business advice from competition sponsors KPMG and Nottinghamshire County Council.

Entries must be made by 27 February, with the winners set to be announced at a glittering ceremony to be held at Nottingham City Council House on 7 July.

To register an interest in this year’s competition, visit the Nottingham Evening Post website

The banking industry says it will help small business customers in difficulty during the economic downturn by revising their guidelines for dealing with customers.

The banking industry has come under intense government pressure to pass on cuts in interest rates and help firms who may be running into trouble.

However the new guidelines put the onus on small businesses customers to ask for help early, and warn that banks will still have to protect themselves.

The guidelines have been published by the British Bankers’ Association (BBA) and include:

• pro-active contact by banks if they think firms might be in trouble
• banks to offer to discuss all concerns in person
• banks will look to use business assets as security before they consider personal assets as security
• business account switching within 5 working days
• banks helping customers to revise their business plans and forecasts during the recession if necessary.

The guidelines have been revised after consultation with the Department of Business, Enterprise and Regulatory Reform (BERR).

However the new BBA guidelines state clearly that a firm in trouble which has agreed a rescue plan with its bank may find that its borrowing costs go up as part of the process - but the bank will explain why.

A competition offering cash rewards for the most inspiring business ideas have been launched in Glasgow.

Four awards of 20,000, plus three months support worth 5,000, are up for grabs in the 2008-09 Glasgow Business Challenge Fund. Run by Glasgow City Council, the fund is open to small and medium-sized firms from the city (maximum of 250 employees) that have been trading for less than three years.

Interested firms are asked to submit a business plan of no more than 40 pages outlining their entrepreneurial spirit, innovation, and their plans for future growth. Shortlisted finalists will then get to pitch their ideas before a judging panel.

Companies have three chances to enter the competition, with the following deadlines set:

30 October 2008.
30 January 2009.
30 March 2009.

Two winners will be chosen from the October round, with one each from the January and March contests.

The Food Standards Agency (FSA) has awarded grants of nearly a million pounds to help food caterers and food retailers improve food safety. Local authorities will administer the grants of up to �50,000, and will involve community groups, local colleges and a range of other organisations in delivery of support to businesses.

The business grants will help almost 5,000 businesses to implement Safer Food better Business (SFBB) ? an innovative and practical approach that helps small businesses put in place food safety management systems. This year the FSA grants have focussed on those caterers and retailers who are harder to reach. SFBB has been developed by the FSA in partnership with industry and local authorities with specific advice available for different cuisines and groups such as care homes.

Applications for the grants were invited in May and applications were internally appraised and considered by an external appraisal panel on 7 August. The panel had representatives from local authorities, LACORS (Local Authorities Coordinator of Regulatory Services), the British Hospitality Association and an academic from Birmingham University. The Agency received 40 applications for grants and 26 were successful, involving 69 local authorities and a range of other organisations.

Northern Ireland’s creative sector is to receive a funding boost of an extra £5 million over the next three years. The extra money will be delivered in the form of a Creative Industries Seed Fund, which will be used to provide business support to creative businesses. The fund will cover issues such as business planning, access to venture capital and start up finance, help with intellectual property issues and marketing support. It is hoped the fund will boost tourism and culture in the region.

Small companies in Britain are missing out on potential business worth £52 billion because they do not have the funding they require, according to a new survey.

One in eight established small- and medium-sized firms in the UK reported missing a business opportunity last year because they did not have the funds to follow it through, reports GE Commercial Finance.

This in turn resulted in average lost sales across the year of £1.4 million each, the companies reported.

“With firms across the country predicting a healthy year of growth, it is vital that they secure the right amount and type of funding early on if they are to achieve their goals and minimise missed opportunities,” said John Jenkins from GE Commercial Finance.

“Professional advisors have a big role to play in supporting firms by ensuring that they can understand and access the right funding solutions appropriate to their business and, crucially, at the right time,” he added.

Of the firms who’d lost out on potential business, the majority (52 per cent) said they’d not been able to follow through on between one and five opportunities.

Great news for social enterprise businesses - the government have recently allocated £1.4 million in grant finance to UK based social enterprises.

The grants will be used to help fund businesses involved in community health and social care. The full news report is available by accessing this charity funding link.

Any charity or not for profit organisation can also benefit from a reduced price grant funding report from Trade Solutions Business Consultancy.