Chancellor of the Exchequer Rishi Sunak announced his Budget to Parliament on Wednesday 11th March; the wider implications of which are sure to impact upon SMEs across the UK.
This budget has come at a rather interesting and complicated time, and included some rather interesting and complicated announcements, but fortunately the tax elements of it weren’t really among them. Most of the tax changes were either announced earlier, or are following on from recent moves and so don’t really change the position much. Certainly, most of them are small beer compared to the changes to business rates, and perhaps the National Living Wage.
There are some exceptions. Entrepreneur’s Relief being cut to cover only £1 million of gains is better than complete abolition, but is rather harsher than some people were hoping for – especially as the anti-forestalling rules mean that people who were trying to hedge their bets slightly are often going to be disappointed. We think that’s probably a lesson for the future: if you think tax rules might change then you need to take firm action, as dithering will just give you the worst of both worlds.
The extension of pension tapering is notable more for being a relaxation of the rules without any of the tightening that has been rumoured for a few years now, and changes to Structures and Buildings Allowances, NIC allowances and Research and Development Expenditure Credit (RDEC) are certainly welcome.
Otherwise the main message seems to be around flagging up areas the Government is interested in, for future consideration. Clearly someone is quite excited by the opportunity to change VAT rates, the SDLT surcharge is another dig at overseas purchasers, and we are interested to see that HMRC are increasingly wanting other people to do their work for them. Local authorities are going to have to check people are registered for taxes, large businesses will have to flag their own issues for enquiry, and tax advisors are going to be reminding HMRC that cross-border tax can be complicated. Fortunately, of course, the question of ‘raising standards of tax advice’ can have no impact on UK200Group members.
Overall, we think this mostly business as usual on the tax side, but it’ll be interesting to see how things pan out over the next year or two.