The latest 'Looking After Business' column from Clay Shaw Butler

Looking After Business - The Carmarthen Journal column by David Butler, of Clay Shaw Butler. 

It is becoming something of a theme that modern-day Budgets often throw up more questions than answers.
So it is with Chancellor George Osborne’s latest effort. The biggest question of all being: Has he done enough to help small businesses?
Here in West Wales, SMEs (small to medium-sized businesses) are vital to the local economy.
Here’s a quick review of some of the things that should (we all earnestly hope) help SMEs -
Corporation tax rates. The main rate of corporation tax is 23% from 1 April 2013. The Chancellor announced in December that the rate from 1 April 2014, which was planned to be 22%, will be reduced by an additional 1% to 21%. The main rate of corporation tax will be reduced to 20% from 1 April 2015 and unified with the small company rate.
The small company rate will therefore remain at 20%.
Annual Investment Allowance (AIA). The AIA provides a 100% deduction for the cost of plant and machinery purchased by a business up to an annual limit. The Chancellor announced in December an increase in the limit from £25,000 to £250,000 for a period of two years from 1 January 2013.
The main point to appreciate is that expenditure incurred after 31 December 2012 may give a full tax write-off, but expenditure incurred before 1 January 2013 may not give this result. Also, note that it may pay to defer the expenditure until after the end of your current accounting period as the full £250,000 AIA may be available.
Capital allowances and cars. A 100% first year allowance (FYA) is available on new low emission cars purchased by a business. There are more than 150 models that can be purchased in 2012/13 which qualify for a 100% FYA. If the purchase is deferred to 2013/14, the number falls to less than 30.
As a diary note, it is probably worth making a note to speak to your financial advisor regarding any possible change of assets in the approach to the end of 2014.
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