BDO comments on Spring Budget

BDO comments on Spring Budget

Commenting on today’s Spring Budget, Paul Falvey, BDO tax partner said:

“Although the Chancellor has not published a roadmap for corporation tax reform, we are now beginning to see the outline of the UK’s longer term approach to business tax policy. This combines higher headline rates with more generous tax reliefs.

Encouragingly, there seems to be a convergence of views between the political parties on this future direction which should provide some consistency and make it easier for businesses to plan for the longer term.

Business groups have been lobbying for some time in favour of a full expensing capital allowance regime, so many businesses will warmly welcome today’s announcement.

The additional reliefs available through the R&D scheme will also be a boost to a relatively small number of R&D intensive SMEs such as life sciences companies and high-level software businesses. However, we still need to see a clearer blueprint for the future of the R&D regime which is so critical to the UK’s attractiveness as a place to invest.

Businesses will also be very supportive of proposals to increase free childcare which will help with recruitment and the retention of talent, and should, in the medium term, provide a real boost to the economy.

However, very few of today’s announcements – barring perhaps the delay to the implementation of overseas R&D expenditure restrictions - will have an immediate effect, so it may take some time before we see any positive economic impact.

Personal taxes

The Budget offered little in the way of relief for hard-pressed income taxpayers. With rates remaining unchanged, and no thawing of the previously announced tax threshold freezes, many more people will find themselves pulled into the higher tax brackets, with more parents becoming eligible to pay the High Income Child Benefit Charge. 

While some will benefit from the increase in the annual pensions allowance, the removal of the lifetime allowance is more likely to benefit people with already significant pension savings.”


Note to editors

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The organisations we work with are Britain’s economic engine –entrepreneurially-spirited, high-growth businesses that fuel the economy.  

We understand the ambitions and entrepreneurial mindset of those we work with and have the global reach, integrity and expertise to help people and businesses succeed.  

BDO LLP operates in 17 offices across the UK, employing 7500 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.

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Frank Shepherd
Tel: 07812 463601