Business tax summary: Osborne woos business with investment treats

The Chancellor has announced a raft of investment incentives in his Budget announcement, most notably a national insurance contributions (NICs) relief for small businesses.

In a bid to help drive growth, from April 2014 the government will introduce a new “employment allowance” that will reduce each company’s NIC bill by £2,000.

Osborne said the allowance will mean 450,000 small businesses will pay no “jobs tax” at all. Up to 1.25 million employers are set to benefit, with more than 90% of the benefit going to small businesses.

TaxCalc’s Alex John said during AccountingWEB's live blog that the move would have a “really big impact” on small business. “For small businesses that are trying to grow, the cost of employing someone is a bit of a blocker, and this new measure goes some way to alleviating that cost,” she said.

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Comments
Steve-EBL's picture

Corporation tax

Steve-EBL | | Permalink

Its an amazing thing the converatives have done reducing corporation tax.  The US has 40% tax on corporate incomes (state/federal) we will have 20%.  This surely is going to make the NPV of future cashflows for companies taxed in the UK significantly healthier.   I think this makes me bullish about the UK, but not much debate about this in the press?

Nic break

Ted Numbers | | Permalink

I think 2013-14 in the header is misleading. It doesn't seem to come in until 2014-15.

It is at least a small step in the right direction but I doubt it will be enough to make a big difference to employment. There are too many other disincentives as well.