Budget reaction

By LBV

24 Mar 2010

Jane Parry, tax partner, PM+M chartered accountants
“Today’s Budget has been very much about keeping the status quo ahead of the election with a few headline grabbing boosts for business, but not much else. I very much suspect that there will be a second budget come shortly after the election, in which there will be much bigger and tougher decisions made.

“There have been no massive income tax surprises; it was as we expected with the 50% income tax rate coming in on 6 April and the phasing out of personal allowances for higher earners. There was a surprise giveaway from a capital gains perspective, with entrepreneurs’ relief being doubled. This relief allows business owners to sell their business or shares and pay only 10% currently on £1m of gains – increasing to £2m of gains from 6 April.

“We also saw an improvement to business capital allowances and a one year business rates reduction for small businesses. We had the usual closure of tax loopholes – forecast to save tax of £500m per year. I am sure the scheme providers will still have some more planning up their sleeves, so this is likely to be a moving target."

John Green, chief executive, Pierce Group, president, North West Society of Chartered Accountants
“We applaud all the measures that have been taken to support businesses, including the support for small companies and business rate cut. Hopefully these will continue beyond the short term. However, it is the doubling of the entrepreneur’s relief and the maintenance of the main capital gains tax rate at 18 per cent that are really cause for celebration.

“This is a strong incentive for entrepreneurs and people considering selling their businesses either now or in the future. The announcement has maintained the differential between income taxes and capital taxes. We were afraid this would be eroded because of the increase in income tax rates for high earners.

“Our concern was that capital taxes would rise similarly which would be a disincentive for people considering starting, incorporating or selling a business, or passing it on to the next generation.”

Colin Tice, tax partner at Cassons chartered accountants and business advisers
“Was Alistair Darling’s Budget speech really a Budget speech or pre-electioneering politics?

“As always, the small print in the Budget press releases will contain the detail. But this was certainly presented as a “Budget for recovery”. A £2.5 billion fund to assist small business innovation and to fund key skills is the headline grabber, funded partly by the £2 billion “payback tax” received this year on bank bonuses.

“SMEs should be encouraged by the doubling of the Annual Investment Allowance for tax relief on capital spend to £100,000 and by RBS and Lloyds making available new business loans to SMEs of around £50 billion next year compared to £38 billion last year.

“The Time to Pay Scheme to enable tax payments to be deferred is to be extended throughout the next Parliament – a welcome extension – and a general reduction in business rates is further good news. And for shareholders in SMEs, those qualifying for Entrepreneur’s Relief reduce their tax on sale by up to £80,000.

“Upcoming tax increases, including the 50% rate, are confirmed but the Chancellor insists these increases are “not out of dogma or ideology”.

“The biggest cheer was saved for the announcement of a tax information exchange agreement with Belize within the next few days, perhaps much to the disappointment of Lord Ashcroft.”

Entrepreneur’s relief

“For many entrepreneurs, the key feature of the Budget will be the Chancellor’s surprisingly generous approach to capital gains tax. There is no increase in the main rate, which is 18%. When the top rate of income tax rises next month to 50%, the gap between the two rates will be striking.

“More significantly for business owners, the amount of Entrepreneur’s Relief is being doubled. At present a business owner who sells a business or company generally has the first £1m of gains taxed at only 10%. From 6 April that will double to £2m. Where a business is owned by a couple, each will have an individual allowance of £2m. That is a tax reduction of up to £80,000 each!

“Many business owners will have rushed to sell their companies before the Budget, just in case the rate of capital gains tax was increased. They will now be licking their wounds. A couple of weeks later and anyone with gains over £1m could have saved tax – and paid the tax a year later!”

Malcolm Ireland, head of Licensing, Napthens solicitors
“The licensed sector is already struggling with several factors combining to mean difficult times for many operators. The increase in duty for the licensed trade simply does not help the situation.

“There is also an argument that measures like this are a false economy. It is highly likely that the closure of pubs we have seen over the last 12 months and beyond will continue as a result. This could well cost the Government more than they make through the duty increase because of the taxes pubs already pay that they will miss out on.”

Kevin Richardson, partner, Garside Waddingham Estate Agents
“Although any help from the government in relation to the property market is welcome, sadly the stamp duty announcement in the budget will do little to benefit the market in and around Preston.

“The changes will only benefit a limited number of local buyers as the majority of first time buyers in the Preston area will purchase a property below the previous threshold of £125,000. Due to the current restrictive lending criteria offered by most lenders only a minority of first time buyers will be in a position to take advantage of the new arrangements even if they wanted to.

“It would have been of real benefit if the Chancellor had offered this stamp duty holiday to all buyers and in particular families with young children who are keen to move up the property ladder.

“As usual the pronouncement is yet another example of style over substance.”

David Kitson, director of tax, RSM Tenon North West
“This was a rather bland Pre-Election Budget with some welcome news for entrepreneurs. The big decisions have been postponed to later on in the year – round two of Budget 2010 may be very different.

“However we have no doubt that the small print will hold a few surprises. The Budget speech itself was light on content so we will only see the full extent once we have completed our detailed analysis of the plethora of information released by the Treasury today.

“The Government’s overriding priority is to get cash into its bank account – in that respect it is no different to the rest of us. So Alistair Darling has sent out some very strong signals to those who deliberately fiddle their taxes or engage in aggressive avoidance: life for them is going to get much tougher.

“On the surface the Chancellor played it safe on tax - the fiscal framework looks very much as it did yesterday. The stamp duty relaxation may give a boost to first time buyers and there was some good news for businesses. 

“We also welcome the increase in Annual Investment Allowance and the reduction in business rates, albeit on a temporary basis.”


 

Enjoyed this? Read more from LBV

Latest news

1

BAE Systems workers vote for strike action BAE Systems production

BAE Systems workers vote for strike action

23 Oct 2025

2

National Cyber Force launches startup programme in the North West Nick Miles, National Cyber Force deputy director for Samlesbury

National Cyber Force launches startup programme in the North West

23 Oct 2025

3

Foresight announces £90m first close of its third North West regional investment fund Foresight announces £90 million first close of its third dedicated North West regional investment fund

Foresight announces £90m first close of its third North West regional investment fund

23 Oct 2025

4

McMurrays Haulage expands fleet after contract win Warehouse Supervisor at Pets Choice Brad Eddleston and McMurrays Sales Manager Rob Spencer. Photo credit: McMurrays Haulage Limited

McMurrays Haulage expands fleet after contract win

21 Oct 2025

5

Dragons' Den star to shine on Lancashire Business Day Derry Green

Dragons' Den star to shine on Lancashire Business Day

21 Oct 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

Help to grow management course
Help to grow - barriers to growth.png.png
LBV Hub Seminars
26 Sep 2025 - 16 Dec 2025

Help to grow management course

Preston Campus , Preston , PR1 2HE

09:00 - 15:00

Women scaling up Blackpool Fylde and Wyre
LBV Hub Seminars
22 Oct 2025 - 09 Jan 2026

Women scaling up Blackpool Fylde and Wyre

The Small Business Academy, Blackpool, FY4 5JX

09:30 - 15:30

RISE - Lancashire's unique leadership programme for women
thumbnail_Emma Weston Illustration WENDY BOWERS RISE Illustrstion.jpg.jpg
LBV Hub Seminars
22 Oct 2025 - 18 Mar 2026

RISE - Lancashire's unique leadership programme for women

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:30 - 15:30

North West Business Expo 2025
https---cdn.evbuc.com-images-880456273-4862066883-1-original.20241022-105445.jpeg.jpg
LBV Hub Exhibitions
24 Oct 2025 - 24 Oct 2025

North West Business Expo 2025

Bolton Stadium Hotel, Bolton, BL6 6SF

09:00 - 15:00

Chamber Business Lunch – October
LBV Hub Networking
24 Oct 2025 - 24 Sep 2025

Chamber Business Lunch – October

Lancaster Golf Club, Lancaster, LA2 0AJ

11:00 - 13:30

Lancaster District Business Support Expo
Lancs-cham-logo.jpg.jpg
LBV Hub Networking
29 Oct 2025 - 29 Oct 2025

Lancaster District Business Support Expo

The Platform, Morecambe, LA4 4DB

10:00 - 15:00

Chamber Breakfast Networking – November
Lancs-cham-logo.jpg.jpg
LBV Hub Networking
06 Nov 2025 - 06 Nov 2025

Chamber Breakfast Networking – November

Porsche Centre South Lakes, Carnforth, LA6 1FW

08:30 - 10:30

Lancashire Police business update with The Police and Crime Commissioner
Lancs-cham-logo.jpg.jpg
LBV Hub Roundtables
10 Nov 2025 - 10 Nov 2025

Lancashire Police business update with The Police and Crime Commissioner

Lancaster Castle, Lancaster, LA1 1YN

14:00 - 16:00

AI, Creativity, and what it means to be human
2.jpg.jpg
LBV Hub Networking
11 Nov 2025 - 11 Nov 2025

AI, Creativity, and what it means to be human

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 20:00

Beyond the Brand: Building trust through values and integrity
1.png.png
LBV Hub Networking
11 Nov 2025 - 11 Nov 2025

Beyond the Brand: Building trust through values and integrity

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 20:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV124 Online Graphic
Subscribe now

Weekly news bulletin