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Tory tax policy

A general election is only a couple of months away.  The opinion polls are divided on the eventual result.  I have no views either way on how you should vote, but I think it is worth looking at the Conservatives’ Corporation Tax proposals to look for possible tax-planning opportunities.

George Osborne, the Shadow Chancellor, proposed Corporation Tax cuts in his interview on 28 February with the BBC’s Andrew Marr.

Mr Osborne promised a cut in small companies’ Corporation Tax rate to 20% (currently 21%) together with a reduction in the top rate of Corporation Tax to 25% (currently 28%).

The Conservatives would hold an emergency budget in June to implement these proposals – assuming, of course, they come to power. Mr Osborne went on to say that these reductions would be paid for by the “abolition of some complex reliefs”.  He wants to “simplify tax” and allow businesses more choice. This indicates the abolition of the valuable Annual Investment Allowance (AIA) for companies.

This allowance enables businesses to purchase capital equipment of up to £50,000 in any accounting year and claim the full amount as a deduction when calculating the amount of profit that is taxable. The allowance covers the purchase of items such as machinery, commercial vehicles, computer equipment, office equipment and furniture.

The advice is to bring forward any proposed capital purchases to before the general election to maximise the tax relief available.

If I can help in any way, please contact me.

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