Tax rise put on hold
Nov 25 2008
The planned one percentage point rise in corporation tax has been put on hold in an attempt to boost small businesses.
Ministers previously planned an increase in the levy from 21 per cent to 22 per cent, due to be effective from April next year.
However, the pre-Budget report, out yesterday, revealed the increase has been delayed to give small businesses a short-term boost and help them survive in the credit crunch.
Accountancy firm Ernst & Young states: 'The deferral on the one percentage point increase in corporate tax for small business will ease the burden for many companies.'
Chancellor Darling stated: 'I believe these steps will help businesses through the current difficulties and enable them to invest.'
Other tax measures to help small businesses announced by Darling in the report include a temporary relief on the empty property levy, meaning buildings with local property taxes below £15,000 will be exempt.
Companies will be able to defer paying their small business tax when they are struggling, with the chancellor saying these firms can pay tax 'on a timetable they can afford'.
However, National Insurance contributions will rise in 2010 under the new pre-Budget report, meaning both employers and staff will pay an additional 0.5 per cent.
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