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Wednesday
Aug112010

How are Small Business Owners Affected by Taxes in the New Emergency Budget?

There are many small businesses in the UK, and here at St Matthew we handle the accounts for a significant proportion of local businesses.  Whenever a new Budget is announced we are always looking to see what changes are going to be made.  But small business owners in particular are always eager to see whether they will be better or worse off as a result of the next Budget.

The most recent one was the first Budget – an emergency Budget – released by the new coalition government that came to power in May.  Needless to say everyone was watching to see how they would fare, and one key area that was of concern to small business owners, was Capital Gains Tax, or CGT for short.

Many thought that the rate of Capital Gains Tax could rise under the new Budget, and in this sense they were indeed correct.  Personally I wondered how high any such rise would go, with some estimates pointing at a rate as much as 50%.

As things turned out it did rise by the significant amount of 10%, as the old rate of 18% was announced to be giving way to 28% instead.  This only applies to those who are earning more than £37,400 per tax year however (according to the current rates).  This represents the current maximum level at which you pay basic rate income tax.

If you own a small business and you are concerned or unsure about how you stand with regard to the new levels of CGT that have been announced, you can get accurate information from us at St Matthew by contacting us now.

 



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