News
Budget Reflections
02 - 08 - 2010
Here is a selection of items:
1. Mr Osborne announced that the rate of mainstream corporation tax would be reduced to 27% from 1st April 2011 and then by 1% for each following year until it became a 24% rate. Rumours had been circulating that if the mainstream rate was to reduced then the small business rate would be abolished. However, it was announced that the small business rate currently 21% would fall to 20% from 1ST April 2011. It has been estimated that this will assist over 850,000 small business owners.
2. Presumably in part to pay for the CT reduction capital allowances are to be reduced by 2% from April 2012. The annual investment rate is also to be reduced to £25,000 from the same date.
Taking the last two items together it must be a good time for businesses to consider the purchase of new vehicles or other substantial acquisitions of plant or equipment.
4. The personal tax allowance has been increased by £1,000 to £7475 for those aged under 65 with effect from April 2011.
5. The previously planned increases in National Insurance contributions will go ahead with effect from 6th April 2011 but the threshold, the point at which employers start to pay National Insurance will be increased by £21 per week above indexation.
Leaving this issue aside one must conclude that the falling rates of Corporation Tax combined with the increasing rates of personal tax will be yet another reason for small businesses to incorporate.