A recent survey has shown that business owners are looking for certainty and stability as the key drivers of Chancellor George Osborne’s tax policy when he delivers his Budget later this afternoon (March 19).
A massive 80 per cent of those polled cited certainty and stability as vital, with almost a quarter saying that uncertainty is the biggest threat to the UK’s tax competitiveness and investment, followed closely by personal tax rates, at 20 per cent and the media focus on multinational taxation and fair tax, at 13 per cent.
The corporate tax rate is expected to be cut from 23 per cent to 21 per cent today, with a further reduction to 20 per cent in April 2015 and 85 per cent of respondents to the survey agreed that 20 per cent was about the right level.
The low rate of corporation tax already seems to be bringing more foreign firms to the UK, along with the jobs and investment that accompany them, but business owners fear that uncertainty could be limiting the impact of the good work that has been done on the corporate tax rate, patent box and Controlled Foreign Companies reforms.
Separately, the creative industry will be listening carefully to the Chancellor’s words later, as, speaking last month, he said that he wanted to build on the valuable cultural and economic contributions the industry has made to UK growth. Mr Osborne is therefore being urged to extend two packages of tax breaks in the Budget, one for British films and the other for high-end TV and animation productions.
Meanwhile, a system of tax relief for UK games developers was announced in 2012 but its roll-out has since been delayed, as the European Commission (EC) is yet to accept the initiative as suitable.
However, the Creative Industries Minister, Ed Vaizey, said recently that the EC’s decision is imminent, so an announcement on this is hoped for in today’s Budget.