Entrepreneurial firms and SMEs who have plans for significant capital outlays are being advised to make the most of the current regime, before the emergency Budget on June 22.
One top 20 accountancy firm, MacIntyre Hudson, is even proactively advising its clients to make the most of current taxation reliefs and allowances.
“Expenditure incurred before the 22nd of June is set to gain tax relief quicker than that falling later,” says Nigel May, tax principal at MacIntyre Hudson. “We’d therefore recommend that any small business planning to make significant capital spend looks to make the most of this current window of opportunity ahead of the next Budget.”
He warns however, that he’s not advising businesses to spend “for spending’s sake” – just to take advantage of the current tax regime before it changes.
We already know that the coalition agreement highlighted that there would be a full review of small business taxation in the emergency Budget.
The fear now is that the proposed simplification of reliefs and allowances may lead to the withdrawal of current benefits available to small businesses. For example, MacIntyre Hudson expects that the Annual Investment Allowance – where businesses get full tax relief on expenditure on the cost of business equipment and machinery – could be affected.
Other business reliefs could also be cut in the emergency Budget, including R&D tax credits and enhanced corporation tax relief for R&D investment; as the government looks for ways to save money.