1) Annual Investment Allowance – The AIA allows business to invest in plants and machinery in a tax efficient way by providing immediate tax relief on this form of investment expenditure. We welcome the increase and the extension to December 2015 as this will help small and medium size businesses to invest, keep the economy moving, and offer a much needed tax break to those business which need it most. It is vital that businesses plan for capital expenditure as the allowances are pro-rata for those organisations which have accounting periods straddling the implementation date.
2) Business Rates and Enhanced Capital Allowances – The ECA regime offers tax incentives similar to the AIA by providing immediate tax relief on qualifying expenditure: generally energy saving products and equipment. If the government is to reach its green targets then these type of measures will become more prevalent going forward especially in those geographical areas deemed to require a ‘business boost’. The same care must be taken as with the AIA in terms of transitional rules.
3) Research and Development Tax Credits – The rules surrounding R&D tax credits remains a complex area and HMRC requires detailed analysis of the activities undertaken by businesses wishing to claim R&D tax credits. However, this move shows the commitment to assisting loss making businesses who embark on innovative new technologies with high growth potential.
4) Stamp Duty – Previous to this change, corporate bodies paid 15% only on purchases with values over £2m and the government estimates that 5000 properties were purchased through companies to avoid paying stamp duty altogether. Clearly, the Government wish to attempt to close this loophole. At this stage it still remains uncertain whether certain concessions will remain in place to reduce the stamp duty paid by companies, but we would advise those looking to make purchases through companies to obtain the appropriate advice.
Once again, please note, the comments above are for general guidance only and should not be interpreted as law. We encourage all individuals and businesses to seek advice from professionals who can provide assistance on your own specific circumstances. If you’re looking for financial advice following the Budget, or want more information on how the changes will affect your business, give MCC a call. Our team of small business accountants can give you the advice and support you need. Get in touch on 0161 707 1500 or send us a message using our contact form.