In his first surprise announcement last week – ahead of the 17 April Budget – the Treasury confirmed that large business will receive tax cuts worth £500m, through breaks announced in last November’s pre-Budget Report.
The announcements – made because of the Budget’s unusually late timing – have ensured adequate notice before the changes came into effect on 1 April.
Tax cuts will be made in the areas of research and development, relief from capital gains tax and a tidying up of the treatment of sales of patents.
Brown said in a statement: ‘In our first term we put stability and employment creation first. In our second term, as we prepare for the sixth Budget, we are able to build on this platform of stability and employment creation and our energies must continue to be directed to promoting enterprise and investment and raising our country’s productivity.’
In a speech made to manufacturers last week, Brown put forward three changes to small business taxation – including an extension of stamp duty exemption for commercial property.
As with his previous announcement, the measures were outlined in the last pre-Budget report and have been the subject of wide-ranging consultation.
They included a community investment tax credit, which aims to stimulate enterprise in disadvantaged communities through tax relief for investment in local enterprises.
The scheme will provide tax relief worth 25% of investment, spread over five years, for investments made through qualifying intermediaries.
He also extended stamp duty exemption for commercial property transactions in disadvantaged areas up from £150,000.
Brown also announced the simplification of the VAT regime for small companies to allow them to calculate their VAT liability using a flat percentage rather than having to work through each individual transaction – possibly saving SMEs £1,000 a year in compliance costs.
Speaking at the TGWU Manufacturing Matters conference in Leeds, the chancellor said: ‘The small firms of today are the big firms of tomorrow. I want people in disadvantaged communities to see that the enterprise culture too often restricted to the elite is open to them – not least in high unemployment communities where employment for too long has passed by.’
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