Budget 2013 reaction: Corporation and Beer Tax cuts
Osborne announced a number of tax cuts, but are they significant enough to make a difference for business owners?
With the government announcing plans to reduce corporation tax by an additional 1% in April 2015, taking it down to 20%, the UK will have the joint lowest level in the G20.
But what does this mean for businesses?
And are the beer tax cuts simply a PR stunt or can they help the pub trade? Business experts share their thoughts:
Michael Wistow, head of tax, Berwin Leighton Paisner LLP
“It can only be good news to reduce corporation tax rates from 2015 to 20% and to abolish transfer taxes on AIM shares. The abolition of schedule 19 is an example of how the government can use the tax regime to the benefit of investors. Schedule 19 was a complex and confusing area of taxation and its abolition will have a small and welcome benefit on the domestic funds industry.”
Toby Ryland, corporate tax partner, HW Fisher & Company
“The additional cut in corporation tax to 20% as of 1 April 2015 was not entirely unexpected but will be welcomed by business, as it makes the UK more competitive internationally. Some, of course, may question why small companies still have to pay corporate tax at the same rate as large companies.”
Jo Nockels, communications manager at TaxAssist
“We would have liked to have seen a fairer distribution of the benefits of reducing corporation tax, however. The 20% single rate for all businesses to be introduced in 2015, might well be the lowest business tax of any major economy in the world, but it means that companies with profits of £300,000 pay the same rate as firms with profits of say just £30,000: a sliding scale would be much fairer to the majority of small business owners.”
Alex Jackman, head of policy, Forum of Private Business
“While many in the industry will see this [scrapping the beer tax escalator] as George Osborne doing too little, too late, we still think it’s a victory for publicans up and down the country who’ve battled against steep increases during extremely lean times. Coupled with the shelving of September’s fuel duty increase, this news will be music to the ears of those landlords in outlying rural areas who rely on customers travelling out to them. But we mustn’t forget, the UK still has some of the most punishing alcohol duty levels in Europe.”