The Chancellor promised a Budget “for people who aspire to work hard and get on”. He also said that it is fiscally neutral. That means that anything he gives to one group of taxpayers must be funded by taking from others. So there will be winners and there will be losers but in practice very little has changed for most people and privately owned businesses.
We are particularly encouraged by the promise to stimulate growth in the construction industry by underwriting deposits for new homes, and not just for first time buyers, but unfortunately, construction looks to be an isolated sector and there were few other industries where significant new measures are likely to trigger a surge of additional investment. Of course, if the construction industry can be stimulated we would assume that there will be a positive knock on effect on others.
The positive step of introducing an incredibly low, flat rate of corporation tax of 20% from 1 April 2015 will remove a significant complexity in calculating tax liabilities, as well as removing tax considerations from much corporate structuring. The new lower rate of mainstream corporation tax is also a particularly welcome incentive for inward investment into our economy but, it might have been useful if the Chancellor had gone one step further in a bid to attract internationally mobile entrepreneurs by abolishing the non-domicile tax charge (although we accept that this might have been politically sensitive) in our bid to become the most attractive nation in which to carry on a business.
We will continue to further consider the detail of the small print in the budget statements and will contact you personally should we identify a matter which has direct impact on you.
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The Clay Shaw Thomas Tax Team