On the 17th March Jeremy Hunt unveiled his ‘Back to Work’ March Budget. Below we summarise some key points.
Increases to corporation tax to go ahead as planned from April. The headline rate will increase to 25% on profits over £250,000.
A small profits rate will be introduced for companies with profits between £50,000 – £250,000 at 19%
Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief providing a gradual increase in the effective Corporation Tax rate.
Small Business Investment Allowance
The Annual Investment Allowance to be increased to £1m.
A new policy on capital expensing to be introduced, to enable ‘full expensing’. The Chancellor stated that this will mean that every pound a business invests in IT equipment, plant or machinery can be deducted in full and immediately from taxable profits.
Fuel duty will be frozen with the 5p reduction maintained for a further year.
Twelve new investment zones will be created. These new innovation clusters will be formed by local governments in partnership with a local university and will receive funding from central government.
Research and development
Small and medium-sized businesses will be able to claim a credit of £27 for every £100 spent, if they spend 40% or more of their total expenditure on Research and Development. For more on R&D click here.
Prepayment metres charges to be brought in line with comparable direct debit charges.
The Energy Price Guarantee (EPG) to be maintained at £2,500 for another three months. It had been due to increase to £3,000 and affects domestic properties only.
Annual Pension allowance and Life Time Allowance
The Lifetime Allowance to be abolished. The annual tax-free allowance is to be increased from £40,000 to £60,000.