In Great Britain tax amendments, entering into force this week, are the most important for generation and entails the most significant reduce of taxes in the sphere of business for last two decades

01.04.2014

The actions of Government of Great Britain in the sphere of supporting business and developing of economy are evaluated in £11 milliards in the financial year 2014-2015

This concerns action to reduce employment costs, business rates, fuel costs and also significant reduction of the main rate of corporation tax.

The following changes take place:

· Reduction of corporate tax from 23% to 21%. It started to fall from 28% in 2010 and this reduction will continue until April 2015, when it reaches a level of 20%

· Increase in two times of the Annual Investment Allowance – tax relief for investment in plant and machinery – to £500. It will be in force by the further year (December 2015). It means that 99.8% of businesses will not pay any tax on capital investment

· Cut the burden of business rates in the manner when its annual growth does not exceed 2%. Low rates of this tax will act for the next year. Thus, more than half a million small businesses will pay tax at reduced rates and a third of a million will be completely exempt from it. Targeted assistance for the downtown area, provided in the form of £ 1,000 discount for trade objects would help approximately 300,000 shops, pubs, restaurants

During the discussion on the tax reform Chancellor of the Exchequer, George Osborne, claimed:

“The government is backing business, which is vital for the UK economy to grow and create jobs. The tax changes taking effect today will reduce the cost of employment, ease the tax burden on businesses and stimulate investment”.

“Since 2010, we have cut all major business taxes and the reforms we are delivering are already having a positive impact on the UK’s competitiveness”.

Based on: https://www.gov.uk/government/news/tax-cuts-for-businesses-worth-over-11-billion-per-year-in-2014-2015

Expert’s opinion

The other side of the fight against tax optimization is reduction of the tax burden inside the country.

The countries, which understand it and reduce the tax burden consistently with simultaneous tightening of tax administration, follow the road of prosperity.

To work in the UK with the companies of the British Crown is always prestigious and convenient.

And now there is also tax relief.

These measures will definitely attract business and money to British jurisdiction. 

Yaroslav Lomakin ( Managing partner of Honest & Bright” company)