21 May 2010 - Coalition Government Announce Emergency Budget Date

Our coalition government will hold its emergency Budget on 22 June, Chancellor George Osborne has announced.

The Conservative Party had pledged before the election to hold a new Budget within 50 days if they were to come to power.  Mr Osborne confirmed the date at a briefing with David Laws, Treasury Chief Secretary.  As part of the Lib Dem/Tory deal, the two parties agreed on making spending cuts of £6 billion this year alone.

Lower Rates of Company Tax?

The Chancellor has reasserted his desire to reform the Company Tax regime.  It remains to be seen whether he will use his first Budget to reduce Company Tax rates, or delay that commitment for subsequent Budgets.

Withdrawal of Capital Allowance Incentives?

If steps are taken, Mr Osborne has signalled very strongly that the reduction in Corporation Tax rates will be financed by reductions in the Capital Allowance Incentives which businesses currently benefit from.  The present Annual Investment Allowance of £100,000 may therefore go completely, or be substantially reduced.  It is unlikely to be a retrospective change, thus, businesses considering investments in plant and machinery may well wish to bring forward planned expenditures to before the 22nd June.

Higher Capital Gains On Non-Trade Assets?

The new Coalition Government has signalled that Capital Gains rates on non-trade assets will rise to higher Income Tax rates.  It is possible this will take place immediately from the Budget date.  George Osborne has intimated that generous Capital Gains relief for Entrepreneurial Investment (presumably trading businesses) will continue.

Individuals contemplating disposals of investments in non-trade assets however, may benefit from doing so prior to the 22nd June 2010, in order to maintain the generous CGT rate of 18%.

Personal Allowances To Increase?

The Government has confirmed their desire that a personal allowance of £10,000 will be achived in graduated stages, hence they may agree to project increases in future years.  Any amendment to this - and next year's - allowance of £6,475 is therefore likely to be modest.

Booth Ainsworth are hosting a series of free Budget seminars following the 22nd of June.  These seminars will include all the highlights from the Budget - the predicted and the unanticipated - as well as helping you understand how the new measures could impact you and your business.  Visit our events page to find out more, and to book online.