Business owners and high earners need to review tax planning after Spring Budget

Announcements made by the Chancellor, Jeremy Hunt, in his Spring Budget mean business owners and high earners should consider their tax planning, according to MJ Bushell.

The Brentwood accountancy firm said that many business owners should be reassessing their investment plans and business strategy in response to the latest fiscal speech.

As part of a plan to help businesses offset the forthcoming rise in Corporation Tax, the Government will introduce ‘full expensing’ that will allow companies to offset 100 per cent of their UK investments in plant and machinery against their profits.

Dan Sayers, Director at MJ Bushell, said: “The ability to offset investment costs will provide a boost to businesses that were anticipating a financial hit from forthcoming rises in Corporation Tax.

“It is a welcome boost for those looking to make big ticket purchases to enhance their business infrastructure.”

R&D-intensive small and medium-sized enterprises (SMEs) will also be able to claim £27 from HMRC for every £100 spent on research and development if they are loss-making.

This measure is a response to upcoming reforms to R&D tax rules, which will see rates of tax reliefs and credits reduced for many SMEs from April.

To help business owners and workers save for later life, the Chancellor also announced new rules for tax on pensions.

The previous Lifetime Allowance of £1.07 million will be abolished from April and the amount that an individual can save into their personal pension each year, known as the Pension Annual Allowance, will increase from £40,000 to £60,000 at the same time.

Dan said: “The scrapping of the lifetime cap on pension contributions is beneficial for high earners and those who might have considered retiring earlier than they would like due to the previous restrictions.

“The rise of the Pensions Annual Allowance allows individuals to boost their pension pot significantly while reducing the amount of tax they pay on earnings.”

There was also good news for employers and employees with regard to childcare. Free childcare provision will be extended to give parents 30 hours a week free childcare to all children aged from nine months to school age by September 2025.

“This new childcare provision is welcome news for both employers and employees to allow parents to extend their working hours or indeed make the choice to return to work should they so wish,” added Dan.

There was also news for motorists with the announcement that Fuel Duty had been frozen and that the 5p cut in fuel duty has been extended by another year.

Dan said: “The announcement that Fuel Duty has been frozen will benefit workers and many businesses in the UK.”

To find out more about MJ Bushell’s tax, accounting and business advisory services, please contact us.

Posted in Press Releases.