Magazine article Management Services

CBI Welcomes the Budget as - 'An Acceptable Package'

Magazine article Management Services

CBI Welcomes the Budget as - 'An Acceptable Package'

Article excerpt

Commenting on the recent budget, CBI director, Adair Turner welcomed the overall package. "We are encouraged by the overall fiscal balance and the prudent approach to public spending together with the continued control of public borrowing. We also welcome a range of useful measures for small businesses and a sensible package of reforms designed to improve the operation of the labour market for lower income earners."

The reform to corporation tax outlined last November is to be enacted largely as proposed. But, following CBI lobbying, medium sized companies (with taxable profits between 0.3 million and 1.5 million) will be exempt from payment in advance, reducing the initial adverse cashflow impact on the business sector to 5.8 billion over the next five years (from 7.7 billion), while leaving the eventual annual benefit largely unchanged at about 1.6 billion.

The budget contained several useful measures for SMEs. As well as exempting small and medium companies from the new payment on account system, it cut the smaller firms' corporation tax rate to 20 percent from 1999. The replacement of CGT retirement relief with a taper of reduced rates for longer-term gains meets the CBI's objective of reducing CGT for a wider range of entrepreneurs, though abolishing indexation will result in some winners and losers. (Larger firms will be pleased that no change will apply to corporation tax on chargeable gains, in advance of specific consultation.) A wide-ranging consultation on promoting R&D looks at the right issues, but must lead to real action. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.