In today’s budget the Chancellor announced an enhanced and accelerated cut in corporation tax for larger companies such that most British companies will be paying a flat rate of 20%, aligned to smaller companies and effectively abolishing the marginal rate.
At the same time £2,000 will be shaved off Employer’s National Insurance bills.
Finance may become easier for non-FTSE listed companies to raise due to the abolition of Stamp Duty on ‘growth markets’.
These changes are a complement to existing rules: With a fairly generous 10% rate of Capital Gains Tax for Entrepreneurs on the first £10m of equity sold, Britain should be one of the most competitive places to run a business. Unquoted and companies on ‘growth markets’ would also normally be exempt from Inheritance Tax on death.
Notwithstanding the good news, we’re still strongly opposed to the reduction in pensions’ savings, specifically the 2014 reduction in the annual tax relieved savings to £40,000 and the total lifetime savings being reduced to £1.25m. For many, a pension will remain one of the most tax efficient ways of extracting wealth from a business. This remains the case, but is less generous than ever before.