George Osborne has completed his Budget 2012 presentation. Here AM picks out some of the aspects which have implications for motor retailers and their customers.
The corporation tax rate will fall to 24% from next month, and then to 23% from April 2013, and 22% in April 2014. As a result, the UK will have the lowest main corporation tax rate in the G7 and the fourth lowest in the G20.
The Office of Budgetary Regulation's assessment is that the reduction announced in the Budget will increase the level of business investment by around 1% by the end of the forecast period. This is equivalent to an increase in the total amount of business investment of £3.4 billion between now and 2016.
To help small businesses raise finance, the Government has launched the National Loan Guarantee Scheme (NLGS), under which the Government will provide up to £20 billion of guarantees to banks, allowing them to borrow at a cheaper rate. The benefit banks receive will be passed through in its entirety to smaller businesses. Businesses that take out an NLGS loan will receive a discount on their loan of one percentage point compared with the interest rate that they would otherwise have received from that bank outside the scheme.
The Government will publish the National Planning Policy Framework (NPPF) by the end of March 2012, coming into force for plan-making and decisions from that point onwards, with appropriate implementation arrangements for local authorities with pro-growth policies in local plans.
In addition, the Government: will introduce further measures to deregulate and simplify the planning system. The Government will shortly consult on reducing information and on proposals to amend the Use Class Order and the associated permitted development rights to make changing the use of buildings easier, for implementation by April 2013.
To reduce the costs and barriers that regulation and administrative burdens impose on businesses, the Government will consult on simplifying the Carbon Reduction Commitment (CRC) energy efficiency scheme to reduce administrative burdens on business, scrap or improve 84% of health and safety regulation, will rationalise environmental regulation to reduce costs to business by at least £1 billion over five years without reducing environmental protections, and will launch sector-based reviews of regulation from April 2012 to ensure regulation is enforced at the lowest possible cost to business.
The Government announced an increase in income tax personal allowance to £8,105 next month and £9,205 from April 2013. However the basic rate limit will be reduced from £34,370 to £32,245 in April 2013. People earning £150,000 or more will see their tax rate reduce from 50% to 45% from April 2013.
It also plans to cap tax reliefs currently uncapped, to curtail the excessive use of reliefs by the highest earners to benefit from low taxation.
From 2016 the 3% benefit-in-kind supplement for diesel vehicles will be dropped, levelling the playing field now that diesels are no worse for emissions than petrol engine cars.
It will continue with its planned 3p tax rise of fuel.
As part of the Government’s ambition to make the UK the technology hub of Europe, it has selected Belfast, Birmingham, Bradford, Bristol, Cardiff, Edinburgh, Leeds, London, Manchester and Newcastle to become ‘super-connected cities’ by 2015 with ultrafast broadband coverage to 1.7m households and 200,000 businesses, plus high speed broadband for 3m residents. Funding will also be provided for a second wave of ten smaller cities.
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