Overlooked tax change 'could have major effects'

Date: 29th July 2008

One overlooked change to business taxation rates could have a serious impact for some small business owners, an accountant has claimed.

Looking back on Alistair Darling's first budget, accountant David Dowell explained in an article in the Press & Journal that the dust has now settled and that it is therefore possible to work out who the "winners and losers in the business world" are.

While briefly examining the impact of changes to capital gains tax and corporation tax, Mr Dowell also points out that one of the most significant taxation alterations has tended to be overlooked.

He explained that the phasing out of industrial buildings and agricultural buildings allowances in the 2007 Budget could end up proving to be a massive blow to some small businesses.

Mr Dowell said that in April this annual tax relief will be reduced by one per cent and will actually be phased out altogether in 2011.

"The full implications have yet to emerge, but the hospitality industry is already pointing to problems as hoteliers not only shy away from future expansion, but also face losing relief on completed projects," he concluded in the article.

The British Chamber of Commerce recently asked the UK's major political parties to commit to not increasing tax rates during the life of the next parliament.