Amanda Tickel, head of tax and trade policy at Deloitte, commented:
“There was nothing mini about this Budget, as the Chancellor announced the most significant package of tax changes we have seen in a generation. All of these are permanent measures, rather than the tax holidays and temporary interventions we have become used to in recent years.
Competitiveness
“This Budget will undoubtedly attract international attention. With the UK now retaining the lowest corporate profits tax rate in the G20, a maximum income tax rate of 40%, and extra incentives available in investment zones, the UK is on a stronger footing to compete for international investment.
Taxes on wages
“Completely abolishing the 45% tax rate and accelerating the basic rate income tax reduction, together with the reduction in National Insurance Contributions, represents a massive tax cut, particularly for high earners who according to OECD data will now pay a lower top rate than those living in Switzerland.
“It was also surprising to see the Chancellor completely abolish the whole IR35 regime on taxing workers.
“Governments across the devolved nations will need to consider that there is a potential divergence between tax policy in Scotland and the rest of the UK; without a change in rates, there will now be a 6% differential between high earners living in Scotland and the rest of the UK.”
Investment zones
“Investment zones give much greater benefits than the existing Freeports regime, including saving employers up to £5,600 of National Insurance and extending Stamp Duty relief to residential property in the zone. We don’t yet know where these will be, but 38 local authorities are in discussion with HM Treasury.
“In order to make these a success the government must focus on effectively communicating the benefits to drive business take-up.”
For further information on the budget please see www.ukbudget.com
Image Jo Smiley Hailey on Unsplash
