Weybridge based accountancy firm TWP Accounting LLP is encouraging small business owners to pay close attention to this year’s budget, as a large proportion of the changes are pertinent to them.
In his speech, Chancellor Alistair Darling announced proposals to make compliance with legislation easier for small and medium sized enterprises, including a £12.5m contribution to a capital fund for businesses run by women.
The abolition of taper relief and indexation relief and the introduction of a flat rate capital gains tax of 18% that was announced last year were met with the widespread opinion that SMEs would be the hardest hit. In response, Mr Darling announced the proposed Entrepreneur’s Relief; a lifetime allowance of £1million to be taxed at the lower 10% rate. In the budget he confirmed that these plans would go ahead in April 2008. The individual annual exemption rate is also increased to £9,600.
He also announced further measures beneficial to businesses, including access to the Small Firms Loan Guarantee Scheme for all firms, rather than those older than five years. There is also to be a 20% increase in available funding.
Mr Darling announced that measures would be taken to encourage more SMEs to benefit from public sector contracts. An independent review would take place, with the aim of achieving a 30 per cent target within the next five years.
Family owned businesses have been given a temporary reprieve from the Chancellor’s planned Family Business Tax (“income shifting”), which he announced in the Budget will be delayed until 2009 to allow for consultation.
Andrew Goddon comments: “SMEs looked set to suffer from many of the changes in this year’s budget, especially in terms of CGT, but the government’s introduction of some new initiatives to encourage entrepreneurship and enterprise is actually a positive move for the sector.”
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