Emergency Budget - Capital allowances
Looking at the comments reported in the press there seems to be a mood within government to reduce corporation tax rates and simplify the overall position. In theory this is good news. In practice there will almost certainly be winners and losers. One obvious area of simplification is on capital allowances where rates range from 10% to 100%. I do not pretend to know what is planned but the last time corporation tax went down first year allowances were abolished and instead a limited 100% relief was introduced - the annual investment allowance. If rates are to go down again will this relief be abolished to make the change revenue neutral?
I would not advocate spending money for the sake of it but if you were planning a capital outlay and had budgeted for 100% on the spend it may be worth making sure this is sorted out before the Budget.
We will be blogging on SME Plus Blog and Tax Plus Blog on Budget day. If you do not already subscribe to our blogs click here for SME Plus Blog or here for Tax Plus Blog to ensure you get our comment and analysis as and when it happens.
Cathy Corns is a tax adviser and a partner at Mercer & Hole. The views given in this blog are personal to the author, if you would like to discuss the contents of this post with Cathy you can call her on 01908 605552.
Date: 2nd June, 2010
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