The Budget, which was announced by the Chancellor on Wednesday 21st March 2012, has been welcomed by entrepreneurs and small businesses. The focus of the Budget appeared to be growth and encouraging investment in the economy. George Osborne announced that the rate of Corporation Tax would be gradually reduced by one percent each year until 2014, reaching 22 percent.
The move to reduce Corporation Tax and cut the top rate of tax to 45p has been welcomed by business groups, saying that the move will help Small and Medium Enterprises. From April 2013, the reduction from 50p will encourage international investment. However, one of the partners at Lyceum Capital, Andrew Alywin, pointed out that although the highest rate of tax is to be reduced, stamp duty will be increased which will negate possible benefits.
The Seed Enterprise Investment Scheme is to be introduced in April 2012, with individuals who invest in seed companies which fit the criteria being allowed 50 percent tax relief. Investments in companies and individuals by Venture Capital Trusts and Enterprise Investment Scheme will no longer have a limit of £1 million, making it easier for businesses to gain access to capital. The National Loan Guarantee Scheme will also be launched by the Government, providing bank guarantees of up to £20 billion so they can borrow at a lower rate. The banks will be expected to pass on those savings to businesses by giving a rate of interest that is one percent lower.
To discover which aspect of the Budget will affect a business, consult a low cost accountants.
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