Budget 2016: Corporation tax, business rates and stamp duty – the key measures for businessComments Off on Budget 2016: Corporation tax, business rates and stamp duty – the key measures for business
George Osborne has delivered his eighth budget and there was plenty in it for businesses large and small to chew over.
Here are the key measures the Chancellor unveiled from the despatch box:
Further cut for corporation tax
Corporation tax is to be cut even further than previously announced.
The Chancellor said that by April 2020 the rate of corporation tax for all companies would fall to 17% from the 28% at which it stood at when the Conservatives came to power.
“Britain is blazing a trail,” said Osborne. “Let the rest of the world follow.”
The use of tax losses against profit will be treated more flexibly, benefiting “70,000 mostly British companies,” he added.
But he also brought in restrictions barring all such carried forward losses to 50% of profits and halving the amount that banks can use to just 25% of their profits.
Retailers given a break on rates
Annual increases to business rates will rise in line with the Retail Price Index, instead of the higher Consumer Price Index, while around 600,000 commercial properties will be removed from the rates tax permanently, the Chancellor announced.
George Osborne said he would end temporary rates relief for businesses on an ad hoc basis, and replace it with a permanent cut for any business with a rateable value of less than £15,000, up from £6000 last year.
Greater London will get powers to collect business rates, rather than getting a proportion from central government, from next year, instead of 2020 as first planned.
Help for British firms battling online giants
Osborne took a number of steps to help small businesses in the new world of online shopping and what he termed “the great unfairness” they face when they compete with global giants like Amazon and eBay.
New actions will tackle overseas retailers who store goods in Britain and sell them online without paying VAT.
And UK micro-entrepreneurs who sell services online or rent out their homes through the internet will benefit from two new tax-free allowances each worth £1,000 a year.
Avoidance crackdown aims to raise £12 billion
The Government plans to raise £12 billion by 2020 by cracking down of a handful of major tax avoidance tactics, the Chancellor said.
One of the biggest changes is to end public sector employees being paid via personal service companies to avoid income tax.
Osborne also revealed a “roadmap” to crack down on multinational tax avoidance to raise a claimed further £9 billion.
Stamp duty cut gives small business a fillip
About 90% of small businesses will benefit from lower stamp duty on commercial property.
Property worth up to £150,000 will be exempt, there will be a 2% levy on the next £100,000 and then 5% for properties of £250,000 or more.
The changes will come in from midnight and raise £500 million a year.
The Chancellor said around 9% will see bills rise.
Soft drinks industry faces sugar tax
The Chancellor unveiled a sugar tax.
The levy, which will raise £520 million, will be charged to companies who make sugary drinks rather than on the cans or bottles themselves. It will be introduced from 2018.
Shares in soft drinks makers AG Barr, Nichols and Britvic plunged immediately after the announcement