The Spring budget was delivered against the gloomy backdrop provided by the Office for Budget Responsibility, which downgraded the 2013 growth prediction it had issued last December, down from 1.2% to 0.6%.
The headline-grabbing measures of the Budget included bringing forward the raising of the personal tax threshold to £10,000 from April 2014 and the axing of the planned September 3p increase in fuel duty.
But all commentators agree that the task of the Chancellor was to deliver a budget for growth, so it was not surprising that the focus of George Osborne’s Spring Budget 2013 was on measures aimed at stimulating business in Britain through changes to business taxes.
- Mainstream corporation tax rate will be cut to 20% from 2015, removing the dual-rate distinction between large and small companies. This makes Britain one of the most attractive places in Europe for multi-national companies to invest in.
- The first £2,000 of employer National Insurance contribution costs will be exempt. As well as meaning an estimated 450,000 small firms will pay no employer National Insurance, this is aimed at encouraging micro businesses and sole traders who might be thinking of taking on an employee but are put off by the costs.
- The Research and Development Tax Credit is to be introduced at the rate of 10% rather than the 9.1% rate previously announced. Again, this is intended to encourage multi-national companies to establish R&D centres in the UK.
- There were measures aimed at encouraging entrepreneurship including relaxing the Seed Enterprise Investment Scheme Rules and providing Capital Gains Tax relief on the sale of a controlling interest in a company.
- Stamp duty will be removed on the sale of shares traded on markets such as the Alternative Investment Market so as to stimulate investment in smaller businesses with rapid growth potential.
The Chancellor announced a shared equity scheme which will provide up to 20% of loan finance to purchasers of new homes. This is intended to tackle the problem of housing shortage across the UK. It will also help people to get on the home-ownership ladder and stimulate the construction industry.
And there’s further good news for the construction sector with an injection of £15bn for new road, rail and construction projects promised by 2020, starting with £3bn in 2015-16.
This is not legal advice; it is intended to provide information of general interest about current legal issues.