Wednesday 12th March 2008
2008 Budget: key points for SMEs
Chancellor Alistair Darling wants to ensure the UK remains ‘one of the best places in the world to do business’. We summarise how the changes announced in today’s Budget will affect small to medium-sized enterprises (SMEs).
Capital gains tax (CGT)
The base rate of CGT will increase from ten to 18 per cent: the new flat rate. So-called “entrepreneurs’ relief” of £1 million over a lifetime will be available as previously mooted, but this will not be applicable to those who have already sold their businesses and are receiving deferred consideration. More details
Capital allowances
The previous system of capital allowances at various rates on different assets has been replaced by a simpler one, which gives businesses an annual investment allowance of £50,000 that they can write-off against tax. The bad news is that the rate of relief on investment above this figure has been reduced from 25 to 20 per cent.
Corporation tax
The tax on profits of under £300,000 will be increased from 21p to 22p in the pound, hitting smaller businesses. The rate levied on profits of more than £1.5 million has been reduced from 30 to 28 per cent.
Income shifting
A threat to tighten rules on income shifting has been delayed for a year, so for the meantime family businesses will still be able to lighten their tax burden by sharing income between members of the family. More details
Enterprise Investment Scheme (EIS)
The limit for qualifying investments under the EIS will be increased from £400,000 to £500,000. According to Paul Webb, tax partner at accountancy firm the Robert James Partnership, this ‘should encourage greater investment into SMEs’.
Public sector procurement
The government will work towards awarding 30 per cent of public sector business to SMEs within the next five years.
Has Darling done enough for entrepreneurs in the UK? Have your say below.
Nick Britton
There are currently no comments on this post.
Related Articles
People who read this article also read ...
Related sections
Interesting links
|
