Govt closes tax loophole

Date: 16th August 2011

Small businesses around the UK could be tempted to seek the assistance of specialist accountancy services following a recent announcement from the government.

The Treasury has unveiled plans to bring forward the closure of a tax loophole, which allowed enterprises to accelerate capital allowance claims for plant and machinery and benefit from early tax relief.

Justine Greening, economic secretary to the Treasury, commented: "The government is determined to reduce tax avoidance in order to protect the Exchequer, which provides funding for public services, and maintain fairness for the taxpayer.

"By ending this loophole today we will preserve important revenue while maintaining a fair system of capital allowances to support business investment."

The change, which was originally scheduled for April next year, has been enforced with immediate effect.

According to the Treasury, the decision was made as delaying the process could result in a "significant loss of revenue" for the Exchequer.

Posted by Emily Smith