Budget 2013: Stamp duty cut and other measures

THE cut in stamp duty reserve tax on growth shares was welcomed by stockbrokers and advisers, although there seemed more enthusiasm for plans to allow investors to tuck Alternative Investment Market (Aim) equities into their savings plans.

The small tax cut – 0.5 per cent – on trading in Aim and ISDX stocks is set to kick from April next year.

George Mason, a tax partner with Johnston Carmichael, said: “You are only looking at half a per cent – it is not significant cost. However, any cut in tax is still welcome.”

The cut led the Chancellor to quip that while in some parts of Europe “they’re introducing a financial transaction tax. Here in Britain we’re getting rid of one”.

This month, the Treasury announced a consultation on allowing investors to hold Aim shares in tax-efficient individual savings accounts (Isas).

Charlotte Black, head of corporate affairs at Brewin Dolphin, said: “Aim shares in Isas is exciting news – a positive signal from the government for those prepared to take a long-term view and put a proportion of their savings as risk capital for small growth companies.

“Encouraging some diversification into niche sectors not offered by the main market with Isa tax incentives is a start.

“Now, the removal of stamp duty in addition is, at long last, a sign that the government is listening to the case for SMEs, and for investors, that equity capital is made a more attractive option than debt finance.”

The measure is expected to increase liquidity and investment in small and mid-size quoted companies. A recent survey by the Quoted Companies Alliance showed that removing stamp duty on trading in small and mid-size quoted company shares was one of the five most popular fiscal measures that would have the greatest positive impact on companies.

Tim Ward, chief executive of the Quoted Companies Alliance, said: “This will create more fuel for the engines of growth.”

Other measures in the Budget’s small print rounded-up by PERRY GOURLEY

• AIR passenger duty to rise in line with inflation next month and again in April 2014.

•A doubling to £10,000 in the size of loans employers can offer tax-free to staff to pay for items such as commuter season tickets.

•Support for Equitable Life policyholders extended to those who bought with-profits annuities before 1992, with payments of £5,000 and an extra £5,000 for those on lowest incomes.

•Exemption for the ceramics industry from the climate change levy which penalises large energy users.

•UK to maintain spending 0.7 per cent of gross national income on international aid.

• Proposals to be developed by the summer to ensure communities will benefit from shale gas projects in their area.

• A new fund launched by Technology Strategy Board offering up to £15 million to support digital content production.

• Standard rate of landfill tax to be increased by £8 per tonne to £80 per tonne from 1 April 2014.

•The cut-off date from which classic vehicles are exempt from vehicle duty to be extended by one year to 1 January, 1974.

• Legally available tobacco-free herbal smoking products liable to tobacco products duty from 1 January, 2014

• Options to be investigated for improving access to credit data on small firms to make it easier for lenders to assess loans.