Deloitte's commentary on the Budget 2010

This Budget has two themes for business: a package of support for small business and the threat of potential tax increases for employees who receive some types of shares in their employer.

The small business support package includes:

  • A one-year holiday from business rates for properties valued up to £6,000, with transitional relief for properties valued up to £12,000. This will apply from October 2010 and is hoped will benefit 345,000 small businesses.
  • Extension of the Business Payment Support scheme for a further five years. This has benefitted over 168,000 businesses, but 80% have made multiple, or repeat applications.
  • Doubling the Entrepreneurs relief limit to £2 million - gains up to this level are taxed at 10%.
  • Boosting by 15% the Government procurement opportunities open to small business.
  • Doubling the Annual Investment Allowance to £100,000 - potentially saving about £15,000 for a tax-paying business.
  • Introduction of a tax-break for the video gaming sector.

The Budget also announced possible limitations on companies using Employee Benefit Trusts and Growth shares to remunerate employees. Both these measures will be consulted on during the summer, with possible changes introduced in 2011. Working out the boundaries between income and capital gains for employees has been a continuing difficulty over many years.

It's disappointing that there isn't a Consultation document on the Patent Box regime. This is due to be introduced in 2011 and the Consultation won't start formally until the summer. This won't leave much time to sort out issues in a potentially attractive and competitive regime.

A further disappointment is that the Government has chosen to ignore all the representations over restrictions on pensions tax relief for higher earners.

For individuals, the increase in the SDLT threshold to £250,000 for two years for first time buyers will be appreciated - it should help over 200,000 buyers each year. There will be a new 5% threshold on residential property over £1 million, arriving in April 2011.

What the Budget means for: