In this short video, Barry Murphy, Tax Partner, talks about the impact of Budget 2013 on larger businesses and whether George Osborne is continuing to deliver on his commitment to send the message that Britain really is 'open for business'.
So, what was the larger business take on George Osborne’s budget today? Well from the outset we really got the Plan A tone, with little room for manoeuvre - but let’s see what he did do:
Again, from the outset, he cited the ‘open for business’ agenda. He is really trying to boost the confidence and the mood music about that, and I think he delivered on some of that in terms of a further indicative rate cut down to 20% on the main corporate tax rate. He talked about the stability in the system; he has talked about the introduction of the general anti-avoidance rule on tax - which we all expected - but he has also positioned that wider multi-national tax system debate, I think in a grown up way. It is about international coordination, it’s about the system and let’s get it right, and I think we can move forward on that.
With regard to regional business in the UK the competitive pot, from the Heseltine review looks like it will be taken forward, but more detail in June and probably no introduction of something and indeed how it sits beside the current regional growth fund until 2015.
In terms of some of the boosters of the giveaways, there were quite a few things on employment – mostly targeted at the small and medium size enterprises – we had a re-affirmation of the creative sector reliefs and a further boost to research and development reliefs, which I think is very welcome.
In terms of some of the industries that were singled out, financial services probably felt it came in for a bit of bashing again today. It was cited in the LIBOR scandal and using money from the fines to fund military and military personnel, but also the bank levy went up again on the basis that he didn’t want banks to benefit from the corporate tax rate deduction, which of course many of them don’t given the losses they have sustained so since the bank levy was introduced we’ve almost had a doubling of its rate, so I think they will feel a little bruised in that sector.
On energy there was some welcome announcements around shale gas and carbon capture, there’s perhaps a bit of schizophrenia in the two measures, some have said to me, and also a home building boost announced through measures to help people buy more houses.
So all of that trying to build on the confidence, trying to build on ‘Britain is open for business’, but without a great deal of manoeuvre to really pump prime very much. So, probably not popping the champagne corks this evening, but if George Osborne is sitting down for a well-deserved beer at the end of a hard day, at least it will cost a little less given that he has frozen beer duty.
Measures announced include the early introduction of the 20% main corporate tax rate in April 2015, progress on international coordination in the multi-national tax debate, as well as measures to stabilise the current UK tax system. Talk of the general anti-avoidance rule was expected and there were some welcome revisions to the tax rules for state contracts - a positive sign that government have listened to business concerns whilst working to achieve their outline objectives.
So, probably not time to pop the champagne corks this evening, but if George Osborne is sitting down for a well-deserved beer at the end of a hard day, at least it will cost a little less given that he has frozen beer duty.
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