The Public Liability Insurance Blog

Budget 2013 and your business

George Osborne

Insurance can protect your business from lots of things. It can protect you from negligence claims, it can protect you from forces of nature, it can tide you over in the case of not being able to trade in some cases and it can protect you from your own employees. What insurance can not protect you from however is the government and its policies.

Therefore, the only way to protect yourself against changes in the government’s stance towards your market is to know what it’s up to. For that reason, let’s take a look at some of the things that have been talked about in the 2013 Budget with a particular focus on small business-related issues.

In the build up to the 2013 budget, chancellor of the exchequer George Osborne stated that he wanted to reward “those who want to get on” and to focus on rewarding people that wanted to work. In his opening speech, he even declared the budget to be one for "hard working people".

This certainly sounded like it was going to be good news for businesses, with references made to fixing the banks and encouraging more businesses into the country with competitive tax rates, so lets take a look at how it looks for the SME sector and see who the winners and losers of this year's budget will be.


All businesses: Probably the most significant part of the budget, corporation tax is being cut next year from 28% to 21% with further measures to reduce it down to 20% by 2015. This will give the UK bragging rights as having the lowest business tax of any major economy in the world and be a massive boon to attracting more companies to our shores.

Pubs: The much despised beer tax escalator, which we have talked about before, is to halt its ascent and is being scrapped. This follows a parliamentary debate held on the matter towards the end of last year and frequent calls from the industry to stop the steadily increasing tax on alcohol.

However, this is only limited to beer. Although a penny is being taken off the price of a pint, other forms of alcohol will still be subject to an incremental above-inflation tax increase.

Small businesses that employ staff: Changes to the way National Insurance works means that all 450,000-odd small businesses will not pay any jobs tax, giving small businesses another financial edge.

Anyone needing a business loan: Osborne set out plans for the government's new Business Bank to encourage more lending for start ups and to encourage growth in the business sector.

As well as this, support was given to the idea of funding local enterprises through a central "competitive pot" and a Osborne endorsed a recently released report on apprenticeships.

This is great news for small businesses looking to expand or entrepreneurs looking to launch a new enterprise. It certainly suggests that the government is keen to throw its weight behind the small business sector.

Small firms in general: Further help for small firms was pledged with Osborne stating: "We'll increase by fivefold the value of government procurement budgets spent through the Small Business Research Initiative".

Creative industries: Tax relief is to be offered on the creative industry for anyone operating in high-end television and animation, with a specific mention for the UK's excellence in visual effects.

Drivers: If driving around is a key part of your business and you find yourself engaged in a lot of travel, you'll be pleased to hear that September's planned hike in fuel duty has been cancelled. This doesn't mean fuel will get any cheaper, but it does mean that it will be 13p cheaper than it would have been had the tax not been frozen.

This is more "things not getting any worse" than "things getting better" but that's still predominantly good news.


Everyone: Unfortunately the Office for Budget Responsibility (OBR) has advised that the UK and all of Europe will remain in recession for the rest of the year, cutting the forecast growth rate in half to a mere 0.6%, meaning it's going to be another tight year pretty much universally.

The more reassuring news is that the OBR does expect the growth rate to increase to 1.8% in 2014 and 2.3% in 2015. Apparently.

Tax avoiders: The government will be cracking down on tax avoidance schemes, even making attempts to close the door on lucrative tax havens such as Jersey and Guernsey. As well as making arrangements to bring over billions of unpaid taxes from these havens, the government is also committing to naming and shaming companies that promote themselves as tax avoiders.

Considering some of the high profile tax avoidance incidents featuring Starbucks and Amazon that have come to light recently, it's hardly surprising that this has featured in the budget.


In general, Budget 2013 has been overwhelmingly positive for the business sector. In other areas there are definitely elements that will disappoint and there have indeed been further cuts announced, but the encouragement being offered to small businesses in general seems like a smart move to encourage stimulation in the economy. Whilst the economic climate can still be described as mostly hostile, the conditions have at least been softened towards those that are most likely to be able to pull us out of recession.

Other excitement

Anyone that follows politics at all will be interested to see that details of the 2013 Budget appear to have been leaked to the Evening Standard ahead of the official announcement. The paper let this slip by tweeting out their upcoming front page which featured unannounced elements of the budget speech.

Although the tweet and image were hastily removed, it didn't stop shadow chancellor Ed Balls sitting through Osborne's speech with a copy of the paper's front page in front of him and preparing questions to ask once the session was over.

Budget leaks have frequently made headlines in the past and are a fairly serious breach of the parliamentary code, meaning this incident could be seriously bad news for Osborne's political career. It probably won't affect you or your business, but it could cause a bit of noise alongside elements of the budget itself.

Written by David Hing for YOUR Insurance, a broker specialising in business insurance.

Image courtesy of George Osborne himself, who very bravely set up a Twitter account ahead of Budget 2013.