Chancellor opts to borrow rather than raise taxes as tough tax decisions are deferred to Autumn
The Chancellor has delivered an ‘essential’ Budget that offers swift and decisive action to help businesses through the economic disruption caused by Coronavirus, according to business advisory firm KPMG.
KPMG’s head of international tax and tax policy at KPMG in the UK, Melissa Geiger, says that the raft of measures to help small businesses, including covering Statutory Sick Pay in full, the Business Interruption Loan Scheme, and Business Rates cuts, will be vital in supporting cashflow and liquidity in the business community.
Melissa Geiger, head of international tax and tax policy at KPMG in the UK, said: “This was an essential Budget from a Chancellor on a war-footing providing short term relief for the expected disruption from Coronavirus. However, it was also a post-election Government mapping out its blueprint for Britain’s future. Whilst the expected reduction of the limit for Entrepreneur’s relief from £10m to £1m will have disappointed some, the pensions relief changes will please others. The Chancellor also set out plans to unleash the power of business particularly by investing substantially in ideas and R&D. Added to the announcements on housing and infrastructure it represented an eye-watering spending plan with little detail on how it is to be funded.
“With few significant tax raising measures announced, it appears the Government has opted to fund planned expenditure with borrowing rather than increased tax. This will kick some of the tougher tax decisions into the Autumn. Business will hope that this signals a willingness to engage in consultation and focussed reform.”
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