BUDGET COMMENT: THE TAX WINNERS & LOSERS
“The Chancellor has clearly delivered a budget for two categories of businesses and business owners today. First, those which he feels can afford to pay more and, secondly, those which he believes deserve a tax break.
“Ordinary businesses which have always tried hard to follow the letter of the law and comply with tax regulations have been an easy target for government to hit in the past. Companies will now see the rate of corporation tax is set to reduce, and small businesses will welcome an increase in the NIC employment allowance to £3,000.
“The fixing of the Annual Investment Allowance at £200,000 is a great example of how regular businesses will benefit from this Budget. The figure has yo-yoed from between £25,000 and £500,000, including one year where the level was changed twice, making it difficult for companies to plan ahead.
“This permanent figure will give small and medium sized businesses much needed stability. By establishing a long term rate, this will drive a longer term investment strategy across the sectors.
“Less encouraging though is the additional tax on dividends that so many business owners rely on for their main source of income. For most he is putting an additional 7.5% levy on all but the first £5,000 of dividends a year.
“It is good news that the focus for raising significant additional tax has now also turned to those who are deliberately not complying.
“The Chancellor has placed emphasis on tackling tax evasion, targeting a figure of 100 prosecutions a year. And in order to get to grips with the hidden economy he is strengthening powers to access information directly from the likes of PayPal and EBay. We are going to see many more tax investigations as a result.”