Will budget make Britain great for our businesses?
Chancellor George Osborne will deliver his budget tomorrow, but what should businesses expect to see unveiled to help them and crucially UK plc escape from the dangers of a double-dip recession?
Clare Goodswen, partner at chartered accountants M+A Partners, said she expected to see the chancellor tackle issues from pensions tax relief, stamp duty, and also extend measures to promote research and development, which could prove crucial to areas such as the Norwich Research Park, the Hethel Engineering Centre, and the Great Yarmouth and Lowestoft enterprise zone.
Businesses will also be looking closely to see whether the chancellor will announce any changes to corporation tax, which is already expected to fall to 23pc by the end of this parliament, or unveil any changes to entrepreneurs' relief.
'All sorts of guessing games are going on from whether the chancellor will scrap all higher rate tax relief on pension contributions to scrapping higher rate relief for those earning more than �150,000, which would take us back to where we were two years ago,' she said. 'I expect to see some form of extension to the stamp-duty holiday for first-time buyers, and I also think the ceiling will be lifted to �175K to encourage movement at the bottom of the market.'
She also said she was not surprised to see the chancellor announce that he would clamp down on a stamp-duty avoidance scheme, where London properties in particular are regu-larly bought via offshore companies.
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'The theme of making the UK an innovation centre will feature heavily so I think there will be more tax reliefs or extensions of tax reliefs around this because the government perceives that our economy will start growing again led by innovative new technologies,' she added.
'I think more money will be pledged to the Green Deal as the funds there are insufficient at present. Of course, the other thing that is interesting is that onshore wind technology is starting to be a bit political – the Localism Bill may make these more difficult – but there could well be enhanced capital allowances given again into alternative energy.
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'There will be real pressure to stimulate the economy with a range of other measures to encourage emplo-yers to take on NEETS (those not employed or in education or training schemes), and maybe an extension of the National Insurance holiday which other areas saw last year but in which we were not included.
'I think that there will be changes to the withdrawal of child benefit for families with a higher-rate taxpayer in it – it will still go ahead but they may alter who is affected. We also do not yet know when this is due to start or the mechanism how this is to be operated, so we may learn that.'
On income tax she said she would be surprised if the �10,000 personal allowance threshold became a reality in this budget, though with statistics showing that lower earners spend tax cuts it could become a reality at the expense of higher-rate tax relief on pension contributions. And we could see a general simplification of accounting/tax rules for small sole traders.
'The main aim will be very clearly to make Britain a great place to do business by streamlining red tape and reducing the tax burden but only by giving tax reliefs for investments by businesses in plant, R&D, and taking on NEETS,' she added.