A budget for business?
Many tax practitioners initially commented that the 2013 budget didn’t contain much encouraging news for business. On reflection, a few weeks later, armed with all the facts and the Finance Bill going through Parliament there were in fact many measures which could have a positive impact on business in the months and years ahead. As seems to be the trend in recent budgets, many announcements were for tax years after 2013/14, as well as a significant number having been announced earlier.
The budget was generally well received by business organisations. John Walker from the Federation of Small Business said “The FSB asked for a budget for small businesses and this is what has been delivered. The budget opens the door for small firms to grow and create jobs.” Whilst John Longworth of British Chambers of Commerce commented that “Business will appreciate many of the Chancellor’s measures.”
Budget highlights for business
• Corporation tax rates
For larger companies this will be reduced from the current rate of 23% to 20% from 1 April 2015, in alignment with the smaller companies rate.
• Annual investment allowance
A 100% allowance for qualifying investments in plant and machinery up to £250,000 per annum was introduced for a 2 year period from 1 January 2013 to 31 December 2014.
• Patent Box
From 1 April 2013, the Patent Box will allow companies to apply a 10% rate of corporation tax to all profits attributable to qualifying patents.
• Employment allowance
From 1 April 2014 every business will be entitled to a £2,000 ‘employment allowance’. This will need to be claimed through payroll schemes and will result in a deduction in employer’s national insurance contributions up to £2,000.
• Enterprise Management Incentives (EMI)
Entrepreneurs Relief is extended to cover gains made on shares acquired through EMI schemes, even if a 5% stake is not held.
• Stamp Duty abolition on growth markets
From 1 April 2014, stamp duty and stamp duty reserve tax will be abolished on share transactions in UK companies traded on AIM and other ‘small company growth markets’.