Chancellor George Osborne has announced measures that will encourage families and businesses according to one Harrogate accountant.
Commenting on today’s Budget speech, Martin Holden, a partner in the Private Wealth Group at Saffery Champness, Harrogate, said that although the 56-minute speech was fiscally neutral overall, there were several ways in which growth should be expected to be stimulated.
“The Chancellor said that this would be a “Budget for making things”. The lifetime allowance for Entrepreneurs’ Relief is to be increased from £5 million to £10 million, and there will also be an increase in the amount that can be invested in EIS companies, by 400%, along with the increase in the Income Tax relief available from 20% to 30%. These moves will clearly encourage those who can build growing businesses, and those who have the ability to invest in them, to do so,” said Holden.
“A further substantial increase in the income tax personal allowance was announced, confirming the aspiration of taking this to £10,000 by the end of this Parliament. However, this time there is not to be an equivalent reduction in the basic rate band, so there will not be more people brought into the higher rates of tax. The Chancellor also confirmed that he views the 50% tax rate as temporary, suggesting its removal as soon as is possible.”
There was good news too for larger businesses with the announcement that Corporation Tax will go down from 28% to 26% in 2011/12, an extra 1% cut compared to what was previously announced, and will ultimately fall to 23% rather than 24%.
“This will clearly be welcomed by large companies, but it does raise the spectre of further consideration as to whether the small companies’ rate will be so close to that for large companies that the small companies rate can be abolished. We would caution against that thought process.”
And there was welcome news on fuel prices.
“The fuel duty escalator is to be replaced by a fuel duty stabiliser, which is intended to stop duty rises when the oil price is high and still protect oil revenues when the price is low. Further, the Chancellor also cut the cost of fuel by 1p per litre from 6pm on Budget Day. This will be very welcomed by households and businesses alike,” said Holden.