Lower corporation tax and improved R&D tax relief to aid small businesses
A number of tax and monetary incentives have been offered to start-up businesses in the UK in an effort to boost growth.
During The Budget speech, Chancellor George Osborne announced that Corporation tax would be cut from 28 per cent to 21 per cent next year, and from April 2015 the main rate would be down to 20 per cent.
Osborne said the tax cut made it “the lowest business tax of any major economy in the world”. He also stated it was the first time since 1973 that Britain had provided a single rate for corporation tax.
The money lost to the budget by tax cuts is expected to be offset by increasing the bank levy rate by 0.12 per cent.
Other measures set to benefit start-ups include improvements made to the Seed Enterprise Investment Scheme and improved rates of relief for above the line research and development claims, a sector which Osborne said was “absolutely central to Britain’s economic future”.
Small-to-medium-sized game developers, as well as other businesses, will also enjoy a new employment allowance, with £2,000 cut from employer’s national insurance contributions.
The Chancellor said he had introduced the scheme as “the cost of employing people is a burden on small firms and is a real barrier to taking a person on”.
“Access to finance is a major barrier for start-ups and growth for the industry and it’s great to see anything that can address this,” said UKIE CEO Jo Twist.
“Games companies really should take advantage of the further improvements announced to the SEIS scheme – this substantially de-risks investing in smaller games businesses. And another drop to the UK’s corporation tax will help make the UK one the best places in the world to make and sell games.”
Despite being pleased with the new proposals, Twist said that more needed to be done to help spur on the game industry, including implementing the now delayed tax relief scheme as soon as possible, acknowledging new ways for companies to attain finance and providing more funding for training a new generation of teachers in computer science.