“Ahead of the Budget business was chiefly calling for stability and certainty and the Chancellor largely delivered on these while also listening to special cases. The oil industry, suffering from the drop in oil price, will benefit from the back dated reduction in the supplementary charge to 20% and the future reduction in petroleum revenue tax rate from 50% to 35% as well as a new simplified investment allowance to come in next month.
“SMEs will welcome the announcement that the investment allowance, temporarily set at £500,000, will not reduce to the old amount of £25,000 although the new amount has not yet been set. The Chancellor has also listened to the call for a review of business rates.
“The usual suspects of the drinks and pub industry benefited with reductions in duty on beer, cider and spirits and farmers were added to the list of beneficiaries with the announcement they will be able to average their income over five years.
“As expected there was a strong theme of preventing tax avoidance – re-announcing the Diverted Profits Tax, preventing contrived use of tax losses and abuse of entrepreneurs relief.
“The Chancellor also maintained another certainty from recent budgets – hitting the banks, this time with an increase in the levy and proposing to deny tax deductions for compensation payments for mis-selling.
“Business had been concerned that the Coalition seemed to be moving away from the original corporate road map and will be pleased that the current budget was “business as usual” with no surprises. At the same time the chancellor has listened and targeted relief where required."
Jessica Liebmann, KPMG Corporate Communications
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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.