Business Rescue: Tax Cuts May Slow Company Insolvency Figures
May 08, 2011 (PRLEAP.COM) Business NewsThe Business Rescue Service provided timely advice for businesses following the Chancellor's budget unveiled last month. George Osborne's new budget brought significant changes to the current rates for business tax. Furthermore, it laid the foundations for future changes to the UK business taxation system as a whole.
Corporation tax was reduced from 27% to 26%, and will be further reduced by 1% annually to over three years. For those businesses trading with higher profits the budget also delivered a reduction on the marginal rate. From 29.75%, it was reduced by 2% to 27.5%.
Further relief for troubled small to medium sized businesses came in the shape of reductions to the amount of tax generally levied on small profits. This was reduced to 20%, in line with pre-budget pledges.
The Business Rescue Service team gave their reaction:
"The good news for businesses is that tax finally was reduced, along with the small profit rate of tax for SMEs. We know from our work within the business rescue sector that a great many firms have struggled to meet their tax obligations over the last few years. We have certainly been seeing clients who have needed some very robust support for tax arrears as they have struggled to move away from the effects of the recession. With this budget there were quite a few very important changes to tax on both a business and a personal level. We are now advising all our clients to consult with us to make sure they get up to date advice as soon as possible. Any businesses should note that there are still some tax items in the budget which are yet to be finalised".
It was also announced that the HMRC's Time to Pay Scheme is to remain in operation. This should be a boost to thousands of troubled UK firms. The Insolvency Service's quarterly statistics for the close of 2010 revealed that in England and Wales, many had simply ceased to trade. Compulsory increased by 5.8% on the previous period. Creditor's voluntary liquidation cases had increased by 11.8% on corresponding figures for the previous year.
Over 1,000 other types of company insolvency were also recorded. Along with tax reductions and keeping the Time to Pay Scheme, the government also committed to an overhaul of the business tax system. The team had this comment:
"Any reduction in impact of tax on distressed firms is timely and welcome news. Nonetheless, our advice is still the same. Tax Arrears are often just one of the problems. We work with various business rescue strategies including company voluntary arrangements, administration, voluntary liquidation and personal bankruptcy for business reasons. We are there to support them with tax and any other financial problems. We will also be there to support them throughout all the coming changes".
For those concerned about company insolvency, the team are immediately available by telephone or email. To speak to one of their advisers, call them on 0845 468 2395 or visit their website http://www.businessrescueservice.co.uk