Business taxes given some respite

The Chancellor of the Exchequer, George Osborne MP, said in his emergency Budget speech that he wants a sign to go up over the British economy saying ‘Open for Business’.

Commenting, Richard Lambert, Confederation of British Industry (CBI) Director-General, said there was clear recognition in the Budget of the role that business needs to play in getting the economy back into shape and generating the jobs and wealth needed to sustain economic recovery.

 

Business highlights

- Regional Growth Fund to provide finance for regional capital projects over the next two years.

- The 10 per cent capital gains tax rate for entrepreneurs, which applied to the first £2m of qualifying gains made over a lifetime, will be extended to the first £5m of lifetime gains.

- Capital allowances for the majority of plant and machinery assets to fall from 20 per cent to 18 per cent, while the allowance for longer-lived assets will fall from 10 per cent to 8 per cent from April 2012.

- Annual Investment Allowance to fall to £25,000 a year to April 2012.

- Mainstream corporation tax rate to fall to 27 per cent in 2011, 26 per cent in 2012, 25 per cent in 2013 and 24 percent in 2014.

- Small companies’ rate of corporation tax to be cut to 20 per cent in 2011.

- The government is to agree the long-term approach to the taxation of foreign profits, intellectual property, and research and development for business.

- Banks: the government is exploring the possibility of a ‘Financial Activities Tax’ on profits and remuneration; a bank levy is to be introduced from April 2011, which will apply to the balance sheet of UK banks and building societies and the UK operations of overseas banks.

- The furnished holiday lettings rules are to be reintroduced.

- New firms outside the South-East/East to be let off employer National Insurance contributions, up to £5,000, for each of first ten employees recruited.

- Planned tax relief for video games industry to be scrapped.