The chancellor’s Budget speech this year could have been a bit of a damp squib. He had already announced so many changes we wondered if it would merely be a formality. However, he still had a few tricks up his sleeve. As well as further clarification on employee share schemes, charitable giving and stakeholder pensions he announced various measures. He also allocated resources to the NHS and low income families. Tax changes tended to be either to encourage enterprise or specific anti-avoidance measures. Keen to keep inflation carefully under control, and anxious to slow down the property boom in the south, he increased stamp duty by another 0.5% for properties over #250,000. Whether this will make any noticeable difference remains to be seen. E-commerce remains a buzz word for the chancellor. He had previously announced ‘discounts’ for filing and payment of tax via the internet. He also confirmed a further #50 discount for small employers. Moreover, he introduced enhanced capital allowances (100%) for expenditure on computers/information technology for SMEs. Such businesses will effectively obtain a full deduction for tax purposes of such expenditure in the period in which it is incurred. Corporation tax on chargeable gains also attracted attention. No longer will groups be forced to transfer assets around the group prior to sale to secure the best tax treatment: instead an election will suffice. In addition rollover relief may be extended to include gains arising on substantial shareholdings in trading companies. Brown obviously felt significant amounts of this tax were being lost to the Exchequer and he introduced anti-avoidance measures, particularly in relation to both stamp duty and capital gains tax. Derek Allen is director of taxation at Institute of Chartered Accountants of Scotland.
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