Budget 2013 - Key points for businesses

Recent budgets have been kind to businesses and this one was no different, once again confirming that the government is keen to support innovation and entrepreneurialism, say RSM Tenon.

There was confirmation of a convergence of the standard rate and small company rate of corporation tax at 20% from 2015.

Further measures to encourage and support SMEs include the introduction of an Employment Allowance and the scrapping of the fuel duty rise which is another welcome boost for businesses overall and, in particular, the haulage industry.

The Government has also confirmed that it will take steps to ensure companies pay  their fair share of tax and do not engage in aggressive tax planning, although no details have been released yet.

From 1 April 2013 we can expect the following:

• The introduction of the Patent Box
• A reduction in the standard rate of Corporation Tax to 23%
• Annual residential property charge for high value properties (>£2m) and a CGT charge on the disposal of such properties owned by non-resident, non-natural persons (i.e. not individuals)
• From 2013/14 eligible small businesses will be able to use the cash basis for calculating taxable income and certain flat rate expenses. This is expected to ease the administrative burden considerably.
• A limited disincorporation relief will be introduced for transfers after 31 March 2013.
• A new share incentive scheme whereby employees will be given shares worth between £2,000 and £50,000 in exchange for giving up some employment rights including unfair dismissal, redundancy and flexible working. A limited income tax and NIC relief will also be introduced.
• For disposals of shares in a company after April 2013, where granted under an EMI scheme, the shares will be eligible for Entrepreneurs’ Relief providing that the option is exercised after 5 April 2012 and at least one year elapses between grant of the option and disposal
• The introduction of an ‘above the line’ R&D credit for large companies
• Further changes proposed for future years to include the convergence of corporation tax rates at 20% from 2015 and consultation on the tax treatment of LLP members.

Top Budget tips for businesses:

• Check whether you are eligible to make an R&D tax credit relief claim
• Check whether the Patent Box regime is beneficial
• Consider the timing of capital expenditure to maximise capital allowance claims and take advantage of temporary increase in Annual Investment Allowance