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Business Measures |
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A wide range of tax and other measures
affecting businesses were announced by the Chancellor. |
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Business Payment Support Service |
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Business rates |
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Small Companies’ Rate of corporation
tax |
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Patent Box |
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R&D tax credits |
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Company cars and vans |
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Business Payment Support Service |
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The 2008 Pre-Budget Report introduced HM Revenue and Customs’ (HMRC)
Business Payment Support Service, designed to help viable businesses
facing temporary financial difficulties to spread tax payments
over an agreed timetable. According to the Government, over 160,000
businesses have taken advantage of the service, collectively
employing more than 1.2 million people, spreading over £4
billion of tax. Of this, more than £3 billion has already
been repaid.
HMRC will continue to offer this service as part
of its time to pay arrangements. All requests will
continue to be assessed on the same basis as when
the service was introduced.
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Business rates |
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In March 2009, the Government announced that businesses could
spread payment of the April 2009 inflation up-rating to business
rates over three years, helping ratepayers for an estimated 1.8
million properties in Britain. The Government also temporarily
increased the threshold at which empty properties are liable
for business rates to £15,000, exempting an estimated 70%
of empty properties. On 18 September 2009, the Government removed
the requirement for businesses receiving small business rate
relief to reapply for relief at revaluation.
The Government is maintaining for a further year
the temporary increase in the threshold at which
an empty property becomes liable for business rates.
For the financial year 2010/11, empty properties
with a rateable value of less than £18,000
will be exempt from business rates. This higher
threshold reflects the effects of business rates
revaluation and is still expected to apply to 70%
of empty properties.
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Small Companies’ Rate of corporation
tax |
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The Government is deferring, for an extra year, the planned
increase in the Small Companies’ Rate of corporation tax.
The rate will remain at 21% during 2010/11. |
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Patent Box |
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The Pre-Budget Report announced the intention to introduce
a ‘Patent Box’, a reduced rate of corporation tax
applying to income from patents from April 2013, designed to
strengthen the incentives to invest in innovative industries.
The Chancellor announced that, following consultation,
this will be a 10% corporation tax rate on income
which stems from patents in the UK.
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R&D tax credits |
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Since the introduction of the R&D tax credit schemes, according
to the Government, over 36,000 claims have been made for R&D
tax credits with over £3 billion of relief claimed, supporting
over £32 billion of research and development activity by
companies.
The Chancellor has now announced the removal of
the condition that any intellectual property (IP)
deriving from the research and development must
be owned by the company making the claim. This
measure is designed to allow companies to benefit
from the R&D tax credit for SMEs without distorting
their commercial arrangements in relation to IP.
It will have effect for any qualifying expenditure
incurred in an accounting period ending on or after
9 December 2009.
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Company cars and vans |
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A new 0% band will apply for company cars propelled solely
by electricity, from 6 April 2010 and effective for five years.
From the same date, and also applying for five years, will be
a reduction to nil of the flat rate charge on company vans propelled
solely by electricity.
The new bands will apply for both income tax (employees)
and national insurance contributions (NICs) (employer contributions).
The fuel benefit multiplier, governing the tax paid by employees
and the NICs paid by employers where free private fuel is
provided, will be increased from 6 April 2010 to £18,000
(currently £16,900). Where fuel is provided for private
travel in company vans the flat rate charge will be increased
from the same date to £550.
The Chancellor also announced a 100% first year capital
allowance for electric vans. The allowance will be available
for business expenditure on new, unused electric vans incurred
on or after 1 April 2010 (corporation tax) or 6 April 2010
(income tax).
The graduated table of company car tax bands will be extended
down to a new 10% band (for cars with CO2 emissions up to
99g/km) and all thresholds moved down by 5g/km with effect
from 6 April 2012.
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