How have some of the recent changes to this years budget 2002 affected various businesses in a town such as Wokingham?

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Jeremy Chang.11V Economics Coursework

How have some of the recent changes to this years budget 2002 affected various businesses in a town such as Wokingham?

Introduction to my coursework and the budget

I have been set a task for my economics coursework, it is to see how the recent changes to the budget this year have affected business in a town.

        The budget has been with us since the Norman times, back then there was no such thing as a budget but evidence of the Exchequer scan be dated to back then. During those past  times, there were two halves for the finance system. The treasury and the Exchequer, both halves organised different areas of the monarchs finance giving out money and receiving it. The word Exchequer comes from the Latin word ‘scaccarium’ meaning chessboard, this is because in court counter were moved along a chess-like board. The word budget is from an old French word meaning ‘bougette’ which means little bag.

        Every year since May 1997, the budget for the next 365 days is presented to the Government by the Chancellor. The budget is always presented sometime during the spring, sometimes a pre-budget is drawn up after that some months later in Autumn, this allows the Chancellor to plan for next years and produce a progress report on what the budget has achieved since its release. This year the budget was released on         the 17th April by the Chancellor Gordon Brown, Mr. Brown has maintained the title of Chancellor since the 2nd May 1997, a period of 5 years.  His speech, which all Chancellors must make, lasted about 1 hour and a half.  

        In this project I will be pursuing certain areas of the budget which will definitely affect everyone and others which may affect them depending on certain factors. I will delve into this further a bit later on. After analysing the 2002 budget since its public release, I have found various changes which may or may not affect businesses. Below are 9 questions which I have created from reading the changes to the budget. Each question is from a different section of the budget which has been changed and I intend to implement them into a questionnaire to give out to some people owning businesses within the town of Wokingham. When the questionnaires are collected back in again, I intend to analyse them and see what everybody’s opinion of these changes to the budget are.


Map and Location

On the next page is what the questionnaire looked like blank with no answers filled into it.

Below is an image of Wokingham showing where the places I have interviewed are located and a map version.

Questionnaire

How will the changes to the budget affected Wokingham

  1. Will the 1% rise in National Insurance rates paid by employers and employees in contracted pension schemes affect you much? You will have to contribute 11% of your earnings between the threshold and the Upper Earnings Limit,1% of any earnings above the Upper Earnings Limit and 12.8% of any earnings above the threshold. For example: for a salary of £20000, the extra national insurance per month would be £12.82.

  1. Will the new car fuel scale charges to be introduced in April next year affect company car fuel charges? A new basis has been introduced to tax the benefit of providing free fuel for private motoring in a company car.  

  1. Do you think the government proposal for tax returns to be submitted online was a good idea?

  1. Will the new change to Corporation Tax starting rate affect you at all? It has gone from 10% to 0%. So a company with profits of only £10,000 pays no tax at all.

  1. Do you think that the government pensions schemes earnings cap that is increased annually inline with retail prices is fair , or should one be allowed to contribute as much as we want?

  1. There have been changes to Research and Development expenditure tax credit, 25% for large businesses; 50% for small businesses. Have these changes affected you at all?

  1. The budget has opened up many new advantages to limited companies ,if you are a sole trader or partnership, to make the most of these advantages have you considered becoming a limited company?

  1. In the recent changes to the budget ,the expenditure is now being independent monitored, rather than centrally monitored. Is this pleasing news?

  1. Overall, do you believe that this new budget has opened up new opportunities for you and the company and that it is beneficial to small businesses?


Analysis and Conclusion

At the back of this project you may find 6 questionnaires each all answered by various employees or owners of businesses within Wokingham. I attempted to go for a variety of businesses in Wokingham and not follow a trend. The businesses that gave me permission to give them questionnaires were all very nice, I ended up with; George Bowcock LTD, Lunn Polly travel agents, Bookends, F -Hinds Jewellers and Snappy Snaps . These companies as you can see are all from different sectors of the economy. Some may have diversified , but the majority of them are still centred around a certain business sector of the economy. For example :Hinds Jewellers has jewellers has diversified into clock and watch repair offering more than just jewellery services, the others still stick true to their main source of income but are slowly diversifying.  I will now analyse the question and the answers which I received.

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  1. Will the 1% rise in National Insurance rates paid by employers and employees in contracted pension schemes affect you much? You will have to contribute 11% of your earnings between the threshold and the Upper Earnings Limit,1% of any earnings above the Upper Earnings Limit and 12.8% of any earnings above the threshold. For example: for a salary of £20000, the extra national insurance per month would be £12.82. This question was a good starter as this affects employees and employers , the 1% rise may not seem much but as the owner of Bookends says , ...

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