Three key tax changes, already announced and discussed here at The Business Lounge, were confirmed in the Budget; corporation tax rate changes, capital gains tax and proposals to change the tax treatment of non-domiciled individuals.

Corporation Tax rate

As announced in the Budget 2007, the Chancellor confirmed the fall in corporation tax rate for large companies from 30% to 28% from April 2008. (Although a rather unfortunate (or is that “fortuitous”?) slip of the tongue allowed Mr Darling to announce a fall from “38%”!).

Strangely enough, no mention of the known increases in corporation tax for small companies, as we discuss in our article “Corporation Tax Rates”, but why reiterate bad news?

Capital Gains Tax

Again, as we previously discussed following the Chancellor’s announcement in his Pre-Budget report in October, the proposed capital gains tax flat rate of 18% will be introduced. (See our article “Capital Gains Tax”). Likewise, the proposed “entrepreneur’s relief” announced in January in response to uproar at the loss of an effective 10% rate for many entrepreneurs, will also be introduced, allowing £1m of gains in an entrepreneur’s lifetime to be taxed at this lower rate, provided various conditions are met.

Non-domicile tax

Not quite “no change” here. Proposals for the treatment of non-domiciles (again covered by The Business Lounge in our article “Non-domicile Tax”) remain in part. As we previously summarised, it appears that a flat rate charge will made to non-domiciles living in this country for more than 7 years, and wishing to benefit from beneficial non-domicile tax rules.

However, the Chancellor seemed to suggest that other anti-avoidance legislation relating to non-doms will not be introduced in their originally proposed form. Don’t expect that this is the end of the matter, however…

See our other Budget articles for new announcements relating to small businesses.

As with all our information in The Business Lounge, this is not comprehensive tax advice, and may not apply to your specific circumstances; to discuss how these issues affect you, contact your accountant.