Commenting on the impact of today's Budget on UK businesses, Bill Dodwell, tax partner at Deloitte, said:

"Overall, there are not too many significant changes for businesses, which will be generally welcome.  There are, however, a great number of small changes and the Budget pack of materials is one of the largest we've seen. The Treasury would help business (and HMRC) by reducing some of this volume of change.

"On the whole, UK companies will not be pleased with the substance of today's Budget. Today's new measures, combined with changes announced in last year’s Budget, mean that businesses will pay an extra £2 billion a year in tax from April. After last year's Budget, businesses were facing an additional £1.4 billion tax bill following changes to capital allowances. Now, the Government wants a further £600 million from them.

"Although badged as anti-avoidance, some of the measures add to business costs in doing business internationally.  They will be borne by a relatively small number of larger enterprises with more complex tax affairs.

"The widely-heralded Consultation Document on  the Taxation of Foreign Profits (measures covering how UK groups pay tax in respect of their overseas subsidiaries and affiliates) has been deferred.  This is welcome, as it indicates that more work is being done by the Treasury on this highly complex and important area.  It is important that the UK's tax regime encourages UK-headquartered groups, which protecting appropriately the UK tax base.

"There will be a welcome for increases in Enterprise Investment Scheme and Enterprise Management Incentive (share options for small, start-up companies, often in the technology sector) limits to £500,000 pa and £120,000 respectively, though EMI schemes are now limited to enterprises of less than 250 employees.  The transition to 18% flat rate capital gains tax following abolition of business asset taper relief has, as expected been softened for many taxpayers by the introduction of the Entrepreneurs relief, apparently expected to benefit about 80,000 taxpayers. The introduction of the £50,000 automatic first year allowance for capital expenditure (excluding cars, but including long life assets) will be a helpful simplification for many small businesses.

Income shifting
"Smaller businesses will be celebrating a minor victory with the decision to delay new 'income shifting' legislation by a year, although they will still be hoping for these rules to be permanently overturned as they pose a significant burden and add to uncertainty.

Non doms
"The Government has responded positively to the consultation over these controversial measures.  We welcome the changes, including the exclusion of minor children from the regime, the drafting of the tax in a way aimed at securing a US tax offset, for US nationals and the removal of offshore trusts, unless income or gains are brought into the UK. The Government's assurance that it will not alter the rules adversely in this Parliament and the next sets out the stable regime that many sought.  

Environmental Taxes
"The Government has started to set out a programme of tax measures aimed at encouraging change.  These include a potential 'plastic bag' tax from 2009; an increase in fuel duty at 0.5p per litre over inflation from 2010; increases in climate change levy, landfill tax and aggregates duty and a new 'showroom tax' on the sale of new, polluting, cars, with a low rate for low polluting vehicles.  However, all these measures will only apply in the future - and this year's petrol duty increase has been deferred to October."

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country’s leading professional services firms, providing audit, tax, consulting and corporate finance services. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities.  Neither DTT nor any of its member firms has any liability for each other’s omissions.  Services are provided by member firms or their subsidiaries and not by DTT.  Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority.  The information contained in this press release is correct at the time of going to press.