Budget 2013: A good package for small brokers

The government has announced a series of initiatives in the 2013 Budget aimed at giving small and medium-sized businesses (SMEs) a helping hand.

The planned changes could be good news for small, entrepreneurial brokers.

From April 2014, the government will cut businesses’ and charities’ National Insurance bills by £2,000 a year through an employment allowance.

The government said in the Budget document: “This will particularly help small businesses who want to hire their first employee or expand their workforce.”

AIM stamp duty

Also from April next year, the government aims to make it cheaper to buy and sell shares of listed start-ups and small companies. It has pledged to abolish the stamp duty for trading shares on the London Stock Exchange’s Alternative Investment Market (AIM) and the ICAP Securities & Derivatives Exchange’s Growth Market.

This could be welcome news for AIM-listed brokers such as Jelf and Brightside.

The government said the stamp duty abolition would “directly benefit hundreds of smaller quoted UK firms, lowering their cost of capital, helping to promote jobs and growth across the UK”.

Employee ownership

The government also announced a series of measures aimed at encouraging employee ownership. Starting from the 2014/2015 financial year, the government will make £50m a year available, for which part will be used to fund the introduction of a capital gains tax relief on the sale of a controlling interest in a business into an employee ownership structure.

This could be a boost for those brokers planning management buy-outs.

Overseas trade

Biba compliance head and chief executive-elect Steve White told Insurance Times: “As a package, the Budget is encouraging for smaller firms.” He pointed to the reduction in the corporate tax rate to 20% frm 2015 and the £2,000 employment allowance as particular positives.

White also noted plans to boost emerging markets trade through the creation of the Financial Services Trade and Investment Board (FSTIB) as a positive for brokers.

He said: “The encouragement and support for industry in winning market share in emerging economies will help those entrepreneurial brokers that want to deal overseas. The creation of the FSTIB seems a suitable vehicle to help co-ordinate that.”