To boost the UK economy, reduce the tax burden on enterprise and to encourage employment, the chancellor should:
- Introduce further tax incentives to encourage business start-ups in employment action zones.
- Improve subsidies for employer funded transport in and out of employment blackspots. Frequently employment blackspots are located next to successful business areas. However, low paid and unemployed people often cannot afford to get to where the jobs are.
- Create tax relief for small businesses to cover the cost of administering the Working Families Tax Credit, Child Tax Credit, minimum wage, Working Time Directive and the repayment of student loans,
- Ensure all people on minimum wage pay no tax. Not only will this boost the attractiveness of employment, but will also relieve the tax compliance burden on companies who primarily employ low paid workers.
- Make the 40 per cent relief on capital expenditure for small businesses permanent. Currently the chancellor renews this capital allowance every year. This leads to uncertainty and causes problems for small businesses in planning future capital expenditure.
- Decouple Stamp Duty payments on domestic and commercial property transactions. Currently attempts to control inflation in the domestic property market via Stamp Duty increases has a major knock on effect on commercial property.
Here are the business tax areas that have already been announced or leaked ahead of the Budget on March 21:
- New All Employee Share Schemes
- Enterprise Management Incentive (share options scheme for key employees in start-up companies) – possibly with further improvements
- Corporate Venturing (Aims to encourage larger companies to invest in smaller ones)
- Tax credit on research and development
- Climate Change Levy
- Reform in the taxation of Intellectual Property
- Increased Stamp Duty on property transactions
- Reduced Stamp Duty on share dealing (but only a possibility)
- Revision to Capital Gains Tax on business assets to make the taper relief more generous