A Midland tax expert has urged George Osborne to use his March Budget to go further in creating more certainty and a stable low tax backdrop for business.
Lucas Markou, a partner in Solihull accountants and business advisers Jerroms, siad he supports the plan to reduce corporation tax to 20 per cent would like to hear the Chancellor announce that this will happen by April 2014, a year earlier than planned.
He added: “At present, the Investment Allowance of 100 per cent write-off against taxable profits on the first £250,000 of spending on plant and equipment is scheduled to be withdrawn at the end of December 2014.
“This is the stage of economic recovery where there is a real incentive to invest to become more competitive and it seems that this allowance has encouraged increased capital spending so should be retained beyond the end of this year”.
Mr Markou also wants to see shareholders in private companies continue to benefit from ‘Entrepreneurs’ Relief’ which allows capital gains on such shareholdings to be taxed at only ten per cent on lifetime gains up to £10m for each individual.
There are conditions for the relief, for example the individual must work within the company and the shares (minimum five per cent holding to be eligible) must have been held for at least one year at the time the gain crystallises.
Mr Markou said: “Entrepreneurs’ Relief is a valuable tax break for the individual concerned and is good for the economy as a whole because it encourages enterprise as individuals invest in businesses with growth potential, reaping the rewards on ultimate sale.
“I welcome the fact that this relief was recently extended to share options and I urge the Chancellor not to reduce or amend this relief.”
To help small businesses, Mr Markou wants to see the figure of sales at which VAT becomes chargeable increased from £77,000 to £100,000.
“An increase of this size would free up a lot of small businesses from the administrative burden, giving them more time to focus on growing their businesses,” he said.