With election fever coursing through the British air, the number of people paying more attention to what’s going on in the UK political scene appears to be at a current high. For business owners however, the biggest lessons to be learned come not from the campaign trail itself but instead from announcements made concerning governmental spending.
Last month’s budget announcements seem to have faded quickly into the background concerning British politics. For British business however, there’s still a lot to be garnered from the budget, especially in regards to measuring income, expenditure and deciding where best to allocate funds.
Here we take a quick look at the UK budget and suggest one or two ways in which it might help positively influence your business moving ahead.
What is the Budget?
Just like a business’ annual financial budget, the UK budget functions similarly. Allowing people and other parties to judge the government’s decision making and economic objectives for the fiscal year ahead, the budget sets forward proposals and gives a glimpse into how the government is going about tackling big issues through income and expenditure in sectors like education, defence, personal social services and housing.
A business might follow suit in their annual budget, making proposals as to how they seek to derive income and where they will allocate funds to help with things like expansion, product development or employee training.
The first part of the UK budget that most people pay close attention to is that of government spending, which shows the financial focus of the current ruling parties and which sectors they have prioritised above others.
2015’s budget shows the areas the government has outlined for spending tax payers money on as well as the amounts they intend to spend. Education, for example, has been allocated 35 billion pounds, whereas health is only set to receive 25 billion.
Many factors go into the government’s spending projections, as they no doubt would in a business or organisation’s proposed spending plans.
The next part of the budget seeks to establish how these proposed spending figures will be attempted to be matched via governmental income. Outlining the variety of sources the government seeks to derive finances from, the budget showcases the types and levels of taxation likely to effect the British public and British business and organisations.
2015’s figures estimate that almost 30 billion pounds will be recouped from business rates, the same figure for council tax and 170 billion from income taxes.
This smart way of outlining exactly where income is expected to come from is a good lesson for a business seeking to create its own budget and thinking about where the majority of funds are likely to come from.
Understanding the UK budget, for business readers, has benefits beyond simply helping to create better budget forecasts for your own business. To find out more about the UK budget be sure to check out the following infographic provided courtesy of BuddyLoans.