Mercer & Hole’s Business blog -

A somewhat varied range of issues on shares was promised in the Budget: •  To encourage the market in shares of smaller companies, the abolition of Stamp Duty on shares listed on AIM and similar markets from April 2014. •  A consultation was announced on the possibility of capital gains tax relief on the sale of a controlling interest in a business into an employee ownership structure and on further incentives in this area, including measures targeted at employees through indirect ownership models.  •  The new employee owner status (shares being given in exchange for relinquishing employment...

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As part of his stated aim of giving the UK the most attractive tax regime for businesses, the Chancellor has announced changes intended to benefit organisations at both ends of the spectrum: Larger – or at least more profitable – companies will see the top rate of corporation tax fall to 20%, from April 2015. This is likely to be the last step in a phased reduction in corporation tax rates, as all companies will pay corporation tax at the same rate, from that date. It also means that the UK’s corporation tax rate will be up to 20% lower than...

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The Government’s commitment to providing help with childcare costs is a welcome boost for working families, albeit the assistance is being phased in from autumn 2015.  The relief will initially help families with children under age 5 and will be extended over time to include children under 12. To be eligible for the relief, both parents must work with each earning below £150,000 and not be receiving tax credits or the universal credit.  The current proposal, which is subject to consultation, is that the government will pay 20% child care costs up to £6,000 ie £1,200 per child.    ...

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By 2015 there will be a single 20% rate of corporation tax. Does this mean corporation tax will fall into a similar regime as income tax and that all companies will pay corporation tax by instalments? ...

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The Chancellor has announced the introduction of a new allowance of up to £2,000 per year for all businesses and charities, which will reduce their employer’s national insurance liability from April 2014. The finer detail has still to be sorted – the Government will consult with “stakeholders” on its plans, the hope being that legislation will be introduced later this year. ...

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As ever the devil is in the detail –the continuing relief for reinvesting gains in SEIS shares will apply to gains accruing in 2013/14 when those gains are reinvested during 2013/14 or 2014/15 but  the relief will apply to only half the qualifying re-invested amount. One very welcome piece of news though is the removal of the anomaly where the legislation prevented a company from qualifying under SEIS where it was initially established by a corporate formation agent.  This will apply in respect of shares issued on or after 6 April 2013. ...

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The Chancellor announced an increase in the threshold for exemption from interest tax on employment-related taxable cheap loans.  With effect from April 2014 loans up to £10,000 may be made – to cover the cost of season tickets for example – with no tax charge on a benefit in kind. ...

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The new employee owner status whereby employees give up employment rights in exchange for shares was not welcomed enthusiastically.   One of the problems was that any shares gifted would be subject – potentially – to income tax and national insurance.  The Chancellor has indicated that this anomaly will be removed.   In my opinion this will not make the offer significantly more popular but I may be proved wrong. ...

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SEIS was introduced for 2012/13 as a version of EIS for small start-up businesses – it offered income tax relief at 50%, a potential exemption from tax on gains on exit after 3 years and – initially for 2012/13 only – the ability to defer gains against the cost of SEIS shares and have that gain also become exempt after three years.  The cessation of the capital gains tax deferral did make the relief potentially less attractive after 5 April and the Chancellor’s announcement that this will be extended is welcome news. ...

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The Chancellor has continued his focus on ensuring that people “play by the rules” and do not seek to avoid tax.  This could be regarded as disingenuous as technically the tax avoidance regime requires playing by a strict interpretation of the rules. I guess he means he wants people to abide by the spirit (or moral compass) of the law.   He referred again to the introduction of the General Anti Abuse Rule and the naming and shaming process.  He also mentioned further action to be taken but no details as yet.  I assume...

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