The UK's emergency budget this week concentrated on benefits and personal taxes with some concession to small and medium-sized businesses.
VAT will be at 20 percent from January next year, with current zero-rated items staying at the same level. Some good news for business, where corporation tax will fall by 1p in the pound each year until it reaches 24 percent from its current level of 28 percent. Small business tax will fall to 20 percent and borrowing will become easier as the Chancellor announced credit will become easier to come by towards the end of the year.
Regional capital projects will be funded from the Regional Growth Fund over the next few years. The 10 percent Capital Gains Tax rate for entrepreneurs will be applied to the first £5million of lifetime gains, up from £2million.
CIPS CEO David Noble said, "This four to one ratio of spending cuts and taxes to cut the deficit is no great surprise but is still unheard of in recent times. Procurement professionals will be much needed by the Government now as smart purchasing strategies will help reduce the pain of making these savings to some extent.
“Some light at the end of the tunnel for SMEs is welcome with more credit and less tax likely to help get businesses moving again."