Chancellor hands out series of perks in first budget
The Chancellor made a serious of headline grabbing announcements in his budget when it came to taxation.
Tax on alcohol and fuel has been frozen and the National Insurance threshold has been raised from £8,632 to £9,500 next month.
Rishi Sunak said: “I’m announcing today £1m of support for promoting Scottish food and drink overseas and £10m of new R&D funding to help distilleries go green.”
“And to further support the industry, I can also announce that this year the planned increase in spirits duty will be cancelled.”
“I can announce that, exceptionally, for this year, the business rates discount for pubs will not be £1,000 – it will be £5,000. And I’m also pleased to announce that the planned rise in beer duty will also be cancelled.”
“And because of decisions I’ve taken elsewhere in the Budget, I am also freezing duties for cider and wine drinkers as well.
“For only the second time in almost 20 years, that’s every single one of our alcohol duties frozen.”
He added: “I have heard representations that after nine years of being frozen, at a cost of £110bn to the taxpayer, we can no longer afford to freeze fuel duty.
“I’m certainly mindful of the fiscal cost and the environmental impacts.
“But I’m taking considerable steps in this Budget to incentivise cleaner forms of transport. And many working people still rely on their cars. So I’m pleased to announce today that, for another year, fuel duty will remain frozen.”
Speaking about the changes to National Insurance he said: “That’s a tax cut for 31 million people, saving a typical employee £104.”
The chancellor resisted calls to get rid of the much criticised Entrepreneurs Relief Fund.
Instead of axing the tax relief the threshold has been reduced from £10m to £1m.
The tax beak was seen as being over expensive and not broad enough and calls to axe were led by the Federation of Small Business.
Tax Partner at Garbutt + Elliott, Becky Maguire commented, “Whilst the headlines may cover a number of good news stories on tax – helping GPs with the pensions taper, increasing the R&D expenditure credit and help on business rates, the detail includes some less welcome announcements. For many business owners, the reduction in the Entrepreneurs Relief Lifetime Allowance from £10m to £1m will hurt – a tax increase of £900k for anyone putting pen to paper on a deal right now and expecting to use the previous full allowance. Others may be more sanguine – a 20% CGT rate on a business exit is still pretty low compared to current income tax rates. The government’s figures predict this change will bring in £1.8bn by 2024/25, a significant amount. In better news, despite rumours suggesting changes were coming to the Business Property Relief rules, the Budget speech and press releases made no comment whatsoever on BPR (and IHT for that matter), much to the relief of business owners across the country! Getting into the detailed Budget papers, it is interesting to note that the previously announced cap on R&D tax relief for SMEs will be delayed by a year and there will be a review of the Enterprise Management Incentives (EMI) Scheme which sounds like it may expand access to EMI rather than reduce it. Both good news for growing small businesses.”