The Treasury believes this will reduce the tax burden for businesses by £150m per year.
The move has been designed to allow businesses to restructure quickly and ensure that decisions are made for commercial, and not tax reasons.
Other measures coming into effect on 1 April include a tax credit to boost research and development among larger companies, and relief on the costs of intellectual property, goodwill and other intangible assets. Gordon Brown believes this will be worth an initial £200m to UK business, rising to a maximum of £350m.
‘The government is determined to press ahead with a pro-enterprise, pro-competition and very importantly, pro-jobs agenda,? the paymaster-general, Dawn Primarolo, said today.
‘The three measures that have been announced today … are all about making sure that we continue to boost measures for productivity to close the productivity gap with our competitors and that we are creating the jobs that we need in our economy,’ she added.
Does Darwin's theory apply to taxation? Colin ponders...
The UK tax gap fell in 2014-15 to its lowest-ever level of 6.5%, revealed official statistics published today
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