George Osborne indicated in today’s Autumn statement that it was his intention to support small business. Simon Massey, Tax Partner at Menzies LLP, has made the following observations on his success on that point:
Reducing pension contribution tax relief from £50K to £40K is another blow to business owners
George Osborne indicated that 99% of pension savers make annual contributions to their pensions less than £40k. However, for many entrepreneurs, the business is their pension fund. Someone who spends 20 years building a business with the intention to sell and put the proceeds into a pension should not be taxed more than someone who has saved the same amount through 20 years of small pension contributions.
Annual Investment Allowance increase to £250K is good news for business investment.
Though it does make you wonder why Osborne dropped it only a couple of years ago.
Taking the main rate of corporation tax down from 22% to 21% does mean Britain is open for business.
But given that this reduction works so well, the government’s insistence on such high personal tax rates and punitive national insurance charges is all the more puzzling.
Four tax avoidance schemes being closed, but no details have been provided as yet.
Once again, the government is shutting the stable door after the horse has bolted. Boutique tax advisory firms still appear to be a step ahead of HMRC.