A specialist corporate tax lawyer says today’s budget could have been a lot worse for business owners and entrepreneurs in the region.
Susheel Gupta, a partner in Higgs & Sons’ expanding corporate team, says the reduction in corporation tax by one per cent per annum over the next four years and the small companies tax rate falling to 20 per cent next year are welcome changes.
“One positive move by the Chancellor is in entrepreneurs’ relief, which brings down capital gains tax to 10 per cent on the disposal of business assets of up to £5 million is a welcome change. The anticipated capital gains tax increase on non business assets to 28 per cent will only affect higher rate tax payers and coupled with retaining the annual allowance of £10,100 is better than expected news.
“For start up businesses in the Midlands it would also appear that there will be a tax break in employers national insurance contributions of up to £5,000 for the first 10 employees recruited.
“The downsides include the reduction in capital allowances for companies from 2012 and the VAT increase from 4 January 2011 will be of obvious concern to many businesses.
“I anticipate that this will lead to a higher level of activity within the retail sector this year but a tough first quarter in 2011.
“Hidden away in the announcement was a warning that the Government intends to introduce more general anti-avoidance legislation and we will have to wait to see exactly what this will entail.”