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Contractors set to benefit from pro-enterprise Budget measures
Posted Mar 28, 2011
We look at the pro-enterprise measures the Chancellor announced last week, some of which are relevant to contractors, and others which should benefit the private sector in general over the coming years.
- A cut in the main rate of Corporation Tax from 28% to 26% from April 1st 2011. The main rate will fall in future years from 26% to 23% by 2014.
- The small profits rate, which applies to the vast majority of contractor companies, falls from 21% to 20% from April 1st 2011.
- The Entrepreneurs' Relief lifetime allowance will double from £5m to £10m from April 2011.
- Income tax relief for individuals under the Enterprise Investment Scheme will increase from 20% to 30% from April 2011.
- The Government has created 11 new Enterprise Zones across the UK, which provide simpler planning rules and tax breaks to qualifying companies. Local areas will bid for a further 10 Zones.
- The rate of SME R&D tax relief will be increased to 200% from 2011 and 225% next year.
- The Enterprise Finance Guarantee scheme is set to continue until at least 2014. The scheme aims to provide lending to SMEs where traditional sources of loans have been inadequate.
- A new Enterprise Capital Fund will be set up, to encourage high grown small businesses.
- The Coalition has pledge to slash red tape in general. New businesses with under ten employees are exempt from complying with new domestic regulations for three years.
- Schools will be encouraged to promote enterprise via the Enterprise Champions Programme.
- Peter Jones' Tenner Tycoon is set to be rolled out on a large scale, giving school children the chance to test out their own business ideas.
- 43 tax reliefs are to be abolished following recommendations by the Office of Tax Simplification .
- Although IR35 is set to stay, the Chancellor plans to consult on the merger of the income tax and National Insurance systems. This is likely to take many years.
Time will tell whether contractors in the oil and gas industries will be affected by the "£2bn North sea tax raid" announced last week. All content ©Contract Eye Ltd. Protected by Copyscape. Please scroll down for related articles.
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