2016 Budget benefits construction industry
From small business rate relief to a commitment to invest in infrastructure,
The construction industry has given a cautious thumbs-up to Chancellor George Osborne’s business-friendly 2016 Budget.
During his speech to MPs, the Chancellor announced that the threshold for small business rate relief will rise from £6000 to a maximum of £15,000 and higher rate relief will increase from £18,000 to £51,000.
This will take around 600,000 small and medium-sized firms out of the business rate tax bracket completely, while a further 250,000 SMEs will pay reduced rates from April next year.
The government has also pledged to spend an additional £300m on infrastructure, including a £140m-plus investment in Crossrail 2, the HS3 rail scheme between Manchester and Leeds, the widening of the M62 and improved road links in the Pennines.
Other business-friendly measures announced by the Chancellor that will benefit construction firms include cutting the main rate of corporation tax from 28% to 20%, with further cuts to 19% in 2017 and 18% in 2020 to come.
Meanwhile, the Employment Allowance – which has already cut the cost of employer National Insurance contributions by up to £2000 a year - will increase to £3000 from April, the Chancellor said.
CBI Director General Carolyn Fairbairn commented: “Businesses will welcome the Chancellor’s permanent reforms to business rates – taking more small firms out of the regime and changing the uprating mechanism from RPI to CPI.
“The reduction in the headline Corporation Tax rate sends out a strong signal that the UK is open for global business investment.”
Housebuilders also benefited from proposals to encourage construction of new homes on brownfield land.
George Osborne announced that the government has unveiled its Starter Homes Land Fund prospectus and is inviting local authorities to access £1.2bn of funding to “remediate brownfield land to be used for housing”.
For more information on the 2016 Budget, click on the link below