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Budget 2011- from Rescue to Reform
In a fiscally neutral budget, in which the Chancellor had little room for manoeuvre, we were pleasantly surprised by the positive approach to business generally and to the SME sector and angel investors in particular.
The key changes were as follows:
EIS
- The initial income tax relief (when making investment) increases from 20% to 30% for EIS qualifying investments. This will encourage those investing into growing businesses and reduce downside risk to 35% of the amount invested for top rate taxpayer with full CGT protection on upside.

- From 2012 the limit for EIS relief will be extended from £500,000 to £1m per annum for individuals and from £2m to £10m for companies.
- Changes are also planned to allow larger companies qualify for EIS relief with a change from a current requirement to have less than 50 employees to less than 250 employees and a higher qualification for gross assets
Entrepreneurs relief
- Lifetime limit to be increased from £5 million to £10 million qualifying for a capital gain tax rate of 10%
R&D
- Subject to EU approval (expected 2012) increases are planned for deductions for R&D to rise to 225% of expenditure which can of course be set off against PAYE as well as Corporation tax or in some cases result in a cheque from HMRC!
These moves will clearly encourage those who can build growing businesses, and those who have the ability to invest in them.
Take advantage of the changes to EIS; Click Here for the Beer EIS Scheme
Date:
Thu, 2011-03-24
