Budget: small businesses to benefit as ir35 abolishment is on
the cards
Chancellor George Osborne provided small businesses with some
encouraging news, including a reduction in the small profits rate
and a national insurance contribution holiday for small start-ups
in certain regions. But the big news is that IR35 may be abolished
soon, according to Grant Thornton.
"The review of small business taxation has taken seven years and
the hoped-for abolition of IR35 looks very much on the cards," says
Francesca Lagerberg, Head of Tax at Grant Thornton.
"The IR35 rules have created problems for over a decade for
entrepreneurs using personal service companies and have led to
hundreds of tax cases, many of which have been lost by HMRC."
"Further incentives for small businesses include an overarching
review of the way that they will be taxed in the future. But in the
short term we have some immediate tangible measures that will help
them."
"The NICs holiday provides welcome support for start-ups outside
of London and the South East. This exempts the first £5,000 of
class 1 employer NICs due in the first 12 months for each of the
first 10 employees hired. This relief will last for three years and
will be very useful as it encourages business to take on their
first staff when they might not otherwise be able to afford
it."
"More good news is the reduction in the small companies rate of
tax which falls 1% to 20% from next April. This reverses the recent
trend of increasing taxation."
For more information please contact:
Alex Wessendorff, press office for Grant Thornton UK LLP, T +44
(0)20 7728 2048, E Alex.Wessendorff@gtuk.com.
Notes to editors:
Live Webinar
We will be running a live interactive internet seminar (webinar)
at 4.00pm on June 24, with a panel of experts who will be
commenting on what the announcement means for the UK economy, taxes
and the public sector. Viewers will be able to email questions in
to the live discussion.
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