TWP is advising businesses that Chancellor George Osborne’s 2012 Budget contains measures which may benefit them.
Giving his statement in Parliament on 21 March 2012, Mr Osborne said that this year’s Budget would “unashamedly back business”. While there were relatively few surprises, the Chancellor did announce a bigger than expected cut in Corporation Tax to just 24% next month.
He also unveiled plans to simplify the tax system for smaller businesses with a turnover of up to £77,000 so that they are taxed based on the cash passing through the business rather than having to do time-consuming calculations better suited to large companies.
Companies working in the video games, animation and high-end television production sectors will also be offered tax relief in a bid to encourage them to choose the UK over other countries for their activities. There are also plans to launch an enterprise loan scheme to help young people set up their own businesses.
Tackling tax avoidance was another key issue, with consultation planned on a new general anti-avoidance rule which Mr Osborne hopes will be legislated for in next year’s Finance Bill. From 22 March 2012, stamp duty on homes worth more than £2 million will be 7%, while for residential properties bought through companies, this will be 15%. Capital Gains Tax will be introduced for homes held by non-UK residents.
The Government is also cracking down on unlimited tax reliefs, with the introduction of a cap of 25% of total income for anyone claiming more than £50,000 in a single year.
Addressing one of the more contentious issues in the Budget, Mr Osborne reduced the 50p top rate of tax to 45p, saying that the 50p rate was harming the economy and had so far raised just a third of the amount expected.
Philip Munk, managing partner at TWP, said: “This year’s Budget brings promising news for businesses, particularly in relation to proposals to simplify the tax system for smaller firms. The reduction in Corporation Tax was also bigger than expected and will be welcomed by many.
“Businesses should pay close attention to what has been announced to see how they can benefit. Even though many of the measures will not take effect for at least another year, we are still able to help business owners make sense of the Chancellor’s statement and, where necessary, assist with planning ahead.”