Midlands manufacturers stand to lose out on the real value of Annual Investment Allowances, R&D tax reliefs and other allowances as a consequence of the Chancellor’s commitment to reduce Corporation Tax to 18 per cent by 2020, the national head of manufacturing at Crowe Clark Whitehill has warned.
Johnathan Dudley said: “Whereas I welcome the reduction in mainline corporation tax, the £200,000 annual investment allowance and other R&D tax credits and allowances will have commensurately less value in the future.”
He pointed out that the annual investment allowance gives 100 per cent relief at the prevailing corporation tax rate.
He said that business owners he had spoken to had also expressed concern that the New Living Wage and the auto-enrolment obligations could coalesce into a move away from employing lower paid workers. “Not what the Government intended at all,” he said.
The proposed Apprenticeship Levy on large companies had also caused concern among employers.
“How does the Chancellor define ‘large’ and is this going to lead to the creation of some kind of quango training board? I hope not. We need more detail. If this is simply going to target the mega-corporates then fine, but otherwise it could have a significant impact on some of our best companies.”