Move to get Britain open for business

In line with his previous Budgets and the Government’s aims of making the UK one of the most attractive locations in the world to do business, the Chancellor once again took further steps towards building his vision of a competitive tax system so that “Britain is open for business”.

The headline is the announcement that corporation tax rates will be harmonised for the first time since 1973, with the Chancellor further reducing the main rate of corporation tax to 20 per cent with effect from April 2015, making it the lowest rate in the G20.

Whilst the corporation tax saving is focused on larger businesses, the Chancellor supported small business and his desire for increased private sector employment through an employment allowance.

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This will be available to all businesses, charities and community amateur sports clubs through a reduction of £2,000 against national insurance costs from April 1, 2014.

This will mean 450,000 small businesses will pay no NIC and 98 per cent of the total benefit will be provided to small and medium-sized businesses.

The focus on innovations and technology also continued with the new ‘patent box’ regime to be introduced at the end of this month being accompanied by an increase in R&D tax credits for large business.

The previously announced incentives to the video games and other creative industries will be further expanded to include tax support for the visual effects industry.

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EU approval is needed; this is still outstanding for video games relief. To help investors in business the Chancellor announced a number of measures to reduce the associated costs, including the abolition of Stamp Duty on investments in shares listed on growth markets such as AIM.

Further reforms in this area will follow in Finance Bill 2014 as the Government looks to introduce a new capital gains relief on the sale of a controlling interest in a business into an employee ownership structure.

For start-ups the capital gains relief for investing in qualifying Seed Enterprise Investment Scheme businesses has been extended for a further 12 months.

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