Chancellor George Osborne’s 2012 Budget could bring a welcome boost to the owner-managed business sector according to tax experts in the Milton Keynes office of international accountancy firm Mazars.
Tax partner Seb Tubb said: “Overall it’s a good Budget for the private sector and after all it is the private sector that is going to get us going again.”
He said that a lot of the changes announced had already been flagged up but he particularly welcomed the acceleration in the reduction of the rate of Corporation Tax.
“The original target announced by the Coalition was to bring the Corporation Tax rate down from 28 per cent to 24 per cent in the term of this Parliament.
“But now we are seeing an immediate move to 24 per cent with 22 per cent as the target and this has got to be good news for business,” he said.
He pointed out that the small companies rate of Corporation Tax remained at 20 per cent and said he felt there might now be an increased tendency by owner-manager directors to take dividends rather than bonuses.
But he said the decrease in the top rate of income tax from 50p to 45p was likely to delay employees taking bonuses.
“In the same way that we saw people taking bonuses early when the increase to 50p was announced, it is likely that we will see them delaying taking bonuses until the new rate of 45p comes into effect in April 2013,” he added.
He welcomed further support for R&D allowances and Corporation Tax reliefs from April 2013 specifically for the film production, video, animation and game sectors.
“I was encouraged by his reference to wanting the UK to become the Technology Centre of Europe and ultra fast broadband in ten cities will help this process.”
He said that Stamp Duty Land Tax planning opportunities were now severely restricted and the Chancellor had made it clear he would crack down on this area.
“The introduction of Capital Gains Tax from April 2013 on properties over £2 million will also hit those who have used overseas companies to own property to avoid taxes.
“As far as the introduction of a General Anti Abuse Rule is concerned – we knew that this was coming and we will have to wait to see the detail to understand further what they intend to bring in with the 2013 Finance Bill.
“But overall this was a good Budget for business and hopefully all the elements put together – higher than expected personal allowance, tax changes, support for particular high-tech industry sectors, the cutting of the top rate of tax and so on – will all help to produce a more optimistic outlook which will translate into a confidence to invest and go for growth,” he concluded.
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