Budget Report 2008

The good news for Small Business owners this year was that the Budget contained no nasty new surprises. Most of the difficult announcements had already been leaked or made previously, such as the Entrepreneurs relief and the 18% Capital Gains Tax rate. There were some interesting postponements, which may be more politically motivated that economically, and a further move towards what appears to be an inevitable alignment of small company and mainstream corporation tax rates.

We heard once again how simplification of the tax system is being looked at, but no great specific details were given and this remains one of the biggest challenges of the current system as the speed of new rules and anti avoidance measures continue to outpace simplification attempts.

Good news included the postponement of income shifting legislation for a year, whereas bad news included the less obvious raising of the upper threshold of class 4 NIC for self the employed to over £40,000 (effectively a potential extra £364 a year), and the increase in Corporation Tax for small businesses to 21% from 20% from 1st April 2008.  Read our article about the April changes for 2008.

Other plans announced which should benefit small businesses include improving access to finance by expanding the Small Firms Loan Guarantee Scheme. £60m extra has been made available and the current age limit of those applying for this funding has been relaxed. From April 2008, all companies with growth ambitions over five years old will have access to this funding.

Hidden extra costs, however, include announcements to commence road pricing trials and an increase in fuel duty, postponed until October 2008.  Small businesses reliant on their vehicles now have time to plan this extra cost.

TaxAssist Accountants have spent time worrying about changes in the Budget so that you don't have to. For a stress free service for all your accountancy and tax saving needs then make sure you contact TaxAssist Accountants today on 0800 0523555 or complete our online form and we will put you in touch with one of our local offices.  Each office is centrally updated with changes in legislation in order to deliver the best service possible to all of our clients.

If you would like to see the full rate changes and allowances then please click here.

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• Updates to Companies Act 2006
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• Pre Budget Report 2008
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