Food escapes VAT in coalition Budget
Food products escaped the feared inclusion into VAT in Chancellor George Osborne's Emergency Budget this week, and will do so for the period of the current Parliament.
Food and Drink Federation director general Melanie Leech commented: “We are relieved that the chancellor has confirmed that most foods will continue to be zero-rated. We had argued against ending existing zero ratings as such a move would disproportionately impact the poorest in society, dampen consumer spending and fuel inflation”
Corporation tax will be cut to 24% from of 28% by 2014, giving the UK the lowest level of corporation tax among major western economies.
Other measures include any new businesses outside London and the south east receiving relief from the first £5,000 of national insurance for the first 10 employees, Capital gains tax for higher rate taxpayers rising from 18% to 28% with a £10,100 annual exemption staying, and lower income investors paying 18% on capital gains beyond this as previously.
Further, the first £5m of lifetime gains will be taxed at 10%, increased from £2m.
The government will also raise the threshold of employer national insurance by £21 a week to avoid the majority of Labour’s increases in national insurance.
Investment allowances for plant and machinery will be cut from 20% to 18% For longer term investments the allowance will be cut from 10 per cent to 8%
According to Stephen Rossides, director of the British Meat Processors Association: “the emphasis is on lower spending rather than higher taxes. There are some useful measures for business.”
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