The Budget: Plenty to please investors - even in Scotland

Published on Wednesday 23 March 2011 15:39

Incentives

THE biggest of a package of incentives was the reintroduction of 21 Enterprise Zones, though currently only in England.

Virginia Beckett, director of capital markets at CB Richard Ellis (Scotland) said it was "highly likely" the Scottish Government would introduce them north of the Border, as the new form of EZ focuses on encouraging development through devolved planning rules and business rates and not the capital allowances that would require the assent of HMRC.

Investors in small firms will enjoy more income tax relief on Enterprise Investment Schemes.

Geoffrey Thomson, the chief executive of Braveheart Investment Group, said the new EIS rules would provide a big boost to high-growth firms he called "gazelles".

The Chancellor has taken a lead from Scotland and will introduce a co-investment fund for business angels, and he plans to double the limit to 10 million on capital gains that qualify for entrepreneurs' relief.

R&D tax credits will rise to 200 per cent this year and 225 per cent next year.

John Anderson, chief executive of the Entrepreneurial Exchange, said the R&D tax credit increase was "fantastic for pre-revenue businesses". Diarmuid MacDougall, lead R&D partner at PwC, said the R&D relief was "great news".

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TIGA, the trade association representing the UK games industry, said R&D credits would be worth around 7m to UK games firms.

Regulations

BUSINESS leaders welcomed the 350 million-worth of cuts to red tape and the exemption of small businesses from any new domestic regulations for the next three years.

The Chancellor promised to launch a public review to reduce red tape, based on the presumption that "all regulations identified as burdensome will be removed unless good reasons are given for them to stay".

Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: "It will be important for the next Scottish Government to work with the UK government to see how Scottish firms can benefit from planned action to tackle the burden of regulation on business."

Small businesses will get special help by being exempt for three years from any new laws introduced after 1 April.

But the British Retail Consortium questioned why the exemption only applied to companies employing fewer than ten staff.Bank levy

George Osborne refused to let lenders off the hook as he increased the bank levy to offset corporation tax cuts.

The levy is to be increased from January, raising a further 285 million in 2012 and is the second announced so far this year after the Treasury last month said the tax would be increased to 2.5 billion this year, raising an additional 800m.

Osborne said his latest move was designed to ensure the corporation tax cut - of 2 per cent in April and 1 per cent each year for three years - would not be a "net tax cut for banks".

But the industry reacted with dismay at yet another change in the levy, which was only brought into force in January, with the British Bankers' Association warning that UK lenders are at a disadvantage internationally.

Matthew Barling, banking tax partner at accountancy firm PricewaterhouseCoopers, said: "Given the UK government's objectives for the UK to remain a world-leading financial centre, it is surprising the Chancellor felt it necessary to offset the benefits of the corporate tax rate reduction with an increase in the bank levy."