The Budget 2011 - Initial reactions
"The commentaries below are written in general terms. Details can also be found in our downloadable Budget Report brochure. You are strongly recommended to seek specific advice before taking any action based on the information given, both in the commentaries and in the publication."
Tim Lyford: Head of corporate tax
"Small businesses look to be winners and the Government seems to be looking to entrepreneurs to lead the recovery by providing a cocktail of tax incentives.
Entrepreneurs and smaller businesses will see a variety of tax incentives from enhancing the reliefs on Enterprise Zones to reductions in red tape, improved access to finance, greater tax relief through EIS schemes for business angels, more flexibility in planning and improved R&D for small businesses – besides a big step up in Entrepreneurs’ relief. "
Revolutionary move to merge income tax and NI
“The indications to merge income tax and national insurance could prove revolutionary and would remove many of the difficulties for small businesses, but it sounds like a very long term project and no timing has been provided but it’s a very worthwhile aim and could help with many of the ugly issues surrounding IR35,” said Richard Mannion, National Tax Director
Emphasis on tax avoidance could spell worsening service to 'average' taxpayers
"Although the government has announced its annual clamp down on tax avoidance and evasion and expects to raise an extra £1 bn, unless HMRC can divert staff to this area, it’s unlikely to achieve its aims.
"However, if tax inspectors are shunted into this supposedly high yielding area, it will mean a lot of ‘average’ tax payers and small businesses are left with little or no support from their local inspector," says Richard Mannion, national tax director
Initial comment for individuals: Non domiciles and residence
There is to be a consultation, which is to be welcomed, on proposed reforms for the taxation of non-UK domiciled individuals and tax residence changes planned to come into effect on 6 April 2012.
There are four main changes:
- increase in the annual charge from £30,000 to £50,000 after residence in 12 out of the previous 15 years
- removing the tax charge on remittances for commercial investment
- “technical simplifications”, and
- a statutory residence test.
A Briefing Note with additional detail will be available on our website later today.