ANNOUNCED AS TEMPORARYNo
Tax or social insurance relief
On 19 March 2014, the British Chancellor George Osbourne presented the annual budget to the parliament.
Increased investment allowance
With the new budget, the annual 100% tax allowance for investment will be doubled to 500'000 GBP and shall last from April 2014 until the end of 2015. Previously, the allowance was planned to be cut to 25'000 GBP at the beginning of 2015. As stated in the annual budget, this means "that up to 4.9 million firms - 99.8% of businesses - will receive 100% up-front relief on their qualifying investment in plant and machinery. Three-quarters of the companies that will benefit from this increased tax relief on investment are outside London and the South East, and it will particularly help the agriculture and manufacturing sectors."
On 8 July 2015, the Chancellor announced during his summer budget speech that the maximum investment allowance shall be lowered to 200'000 GBP on 1 January 2015 (cf. Related Measures). Hence, this part of the measure is no longer implemented.
"Best export finance in Europe"
According to the budget, Britain offers "the best export finance in Europe" by doubling the direct lending programme to 3 billion GBP. Furthermore, the rate charged on these loans shall also be cut.
Global Entrepreneur Programme extended
The budget also includes an extension of the Global Entrepreneur Programme for another two year with funds of 1.2 million GBP in each year. The programme is aimed at attracting start-ups to the United Kingdom.
State aid related to environmental issues
Furthermore, Osbourne's budget included a capping of the Carbon Price Floor (hereinafter: CPF) at 18 GBP from 2016-17 until the end of the decade in order "to limit any competitive disadvantage British companies face in the global race", saving British entities "up to 4 billion GBP by 2018-19". For energy-intensive industries, Britain will extend its compensations for the CPF and EU emission trading system up to 2018-19. Lastly, the budget introduces a new compensation scheme startin 2016-17 for energy-intensive sectors with "higher electricity costs resulting from the renewables obligation and small-scale feed in tariffs for renewable generation".
These compensation schemes shall cost around 500 million GBP annually.
According to the budget, "the government will exempt fuel used in combined heat and power plants for electricity generated to supply manufacting firms from the" power plants.
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.
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