Ray Boulger senior technical manager at mortgage broker John Charcol said this is a useful saving of costs, particularly for computer-based start-ups. Although he added: “For customer-facing businesses like brokers, who need to be in front of their clients this may not have much impact, but may have more relevance for the support industries.”
The FSB warned that Government plans to hike VAT to 20 per cent from 17.5 per cent will hurt small businesses in the high street.
John Walker, national chairman, Federation of Small Businesses, said: “However, we are pleased that there is some time to go before the increase takes place and it is interesting to note that common sense has prevailed with the increase coming into play on 4 January 2011 and not on New Year’s Day. “
Among the many other tax changes, the trade body also picked out the move to increase the Entrepreneurs Relief threshold to £5 million from £2 million.
Boulger said the cut in Small Companies tax would also be welcomed by small IFA firms but was unlikely to make the difference between survival and failure. However, he said the graduated Corporation tax cuts over four years were “very sensible.”
Andrew Strange, director of policy, AIFA acknowledged that “this is a tough budget for tough times.”
He said: “The reduction in the headline rate of Corporation tax is good news for IFA businesses. The further reductions over the next three years, in addition to the lower tax rate for smaller firms, will also provide a timely boost as the advisory profession seeks to recover and grow.
The tax headlines
CGT – lifted from 18 to 28% for those paying higher rate of tax
10% CGT rate for entrepreneurs extended to first £5 million of qualifying gains
Corporation tax down from 28p over 4 years, 1p each year, to lowest rate in G20
Small companies tax rate to be cut to 20% from 21%
Business rate bill cancellations
NICS exemption for up to 10 employees, £5k maximum per employee ouside London and the south East
A rise in VAT from 17.5% to 20%
To see the speech in full, click here
