Energy News – 21/01/2017
The week of Donald Trump’s inauguration has seen shaky energy markets, a landmark Brexit speech by Theresa M...Read More
Chancellor George Osborne said that over the next few years the annual tax return will be phased out in favour of a new, more straightforward digital system.
This will also involve companies’ financial information being automatically sent to HM Revenue & Customs and firms being presented with a “simple, single business tax” rather than a mixture of corporation tax and VAT, for example.
The government said that the move to an online-only system would begin with the UK’s 5 million small companies, and should come into effect in 2016.
Graeme Swan, managed services partner at consultant EY, said: “The decision to start with small businesses is a logical one and will ensure these firms can spend more time growing their businesses, which is vital to the continued growth of the UK economy, rather than spending valuable time dealing with an overly complex UK tax system.”
Osborne confirmed that corporation tax would be cut to 20% from next month, but added that self-employed people would no longer be required to pay Class 2 National Insurance contributions from the next Parliament.
Also from next month, companies which employ under-21s will no longer have to pay National Insurance on their earnings, although this change was originally proposed at the end of 2013.
In another change, farmers will be given more time over which they can average their profits for the purposes of calculating income tax.
At the moment profits can be averaged over two years, but this will be extended to five from April 2016 to help them cope with uncontrollable factors such as the weather and seasonal demand.
Ministers have also announced a comprehensive review of the business rates system which currently applies to 1.8 million properties in England.
Treasury secretary Danny Alexander said: “The government has taken measures to help businesses by capping rates and introducing reliefs for smaller businesses. But now the time has come for a radical review of this important tax. We want to ensure the business rates system is fair, efficient and effective.”
Osborne also announced that he would once again freeze fuel duty, which had been scheduled to rise in September. He said that by the end of the next financial year, duty will have been frozen for five years, the longest period in more than two decades.
Osborne also announced a package of measures aimed at supporting the North Sea oil industry, which has been hit with a sharp fall in the price of oil since last summer.
Publicans and retailers are likely to welcome the news that beer duty is to be cut by 1p for the third consecutive year, while here is also a 2% duty cut on spirits and most types of cider as well as a freeze on duty on wine.
The government said that it also planned to boost broadband speeds and to investigate the use of satellite technology to keep more remote communities and businesses connected.
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