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Budget 2013: Deloitte comments on announcements for entrepreneurs

21 March 2013

Debbie Griffiths, private markets tax partner at Deloitte, comments:

Tightening rules on use of partnerships
“Partnerships have been used in the past by some organisations to disguise employee relationships, which, subsequently, have resulted in an employer’s National Insurance Contribution saving. However, many unincorporated SMEs use genuine commercial LLP structures. Since this could mean material changes in the tax treatment of LLP in the future, it will be important to ensure these groups are not inadvertently caught out by the rule change.”

Seed Enterprise Investment Scheme (SEIS)
“SMEs, particularly in the early stages, looking for much needed assistance with raising finance should be aided by the extension to the SEIS. Since it offers tax relief to individuals who buy shares in start-ups, it will encourage investment into small enterprises that may otherwise struggle for external funding.”

Employee share ownership
“There can be little doubt that encouraging employee ownership is good for the UK economy. It is therefore ironic that smaller companies can sometimes find it more difficult to achieve than quoted companies. Anything that makes it easier for these smaller businesses to deliver shares to their employees will be welcome. The Government’s proposals to offer people extra tax relief for giving up some employment rights may be attractive to a small number of employees joining start-ups. However, for the employing company, if they wish to keep to the minimum £2,000 tax free value, this could be complex to administer.”

National Insurance: £2,000 employment allowance
“This is good news for entrepreneurs and very small businesses, since it will encourage them to take on more people. It will also support other employment costs, such as the extra cost of real time information and PAYE and the new auto-enrolment into pension schemes.”  

£10,000 personal allowance
“Employers will now be able to offer employees loans up to £10,000 tax free. As an example, employees could use this towards their season ticket loans.”

Ends

Notes to editors
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities.

Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited

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