In his final Budget before the election, The Chancellor delivered a package of measures he hopes will support business and employment as he prepares for the General Election on May 7, 2015.
From a business perspective, alongside the usual detailed measures around tax policy, the Budget contained a number of changes that are likely to be welcomed by business leaders in the region.
As was widely trailed, the Chancellor sought to provide help for North Sea oil producers, reducing the supplementary charge from 30% to 20% and cutting petroleum revenue tax from 50% to 30%.
Given the marked decrease in oil price over recent times, the assistance provided is likely to be welcomed by the many businesses in the region that are closely linked with North Sea oil production.
The Chancellor also reiterated the commitment to a wide ranging review of Business Rates, as promised at the Autumn Statement – the terms of which were announced on Monday by Danny Alexander MP, Chief Secretary to the Treasury.
As an area in which the business community have long made representations encouraging reform – the review of the structure of the current system will be welcomed.
The review is expected to examine modernisation of the system to better reflect changes in value of property over time.
Across the wider business tax agenda, the Chancellor included specific measures that will be of interest to businesses with international interest and those with complex affairs.
In particular, the ‘Diverted Profits Tax’ – a tax designed to tax profits in the UK that are ‘artificially moved offshore’ will come into effect next month.
Tax reform in an international context remains an important part of the business tax landscape, and today’s announcements represent one of a series of important developments expected over the coming months.
As ever, the Chancellor has taken the opportunity to take specific, targeted action on a number of narrow ‘loopholes’ identified across a number of areas.
Specific areas in which the Chancellor has taken steps include business seeking to utilise tax losses as part of ‘contrived arrangements’, removal of tax relief on travel and subsistence expense for workers engaged through certain Employment Intermediaries, and access to Capital Gains reliefs on business disposals falling within certain narrowly defined circumstances.
Contact: Stuart Cottee, North East Tax Partner, firstname.lastname@example.org