Lowtax article, any use for people here?
Small businesses need to act now to meet the March 31 deadline to qualify for 100% tax relief on their IT expenditure.
Expenditure on information and communications technology by small enterprises currently attracts first year capital allowances of 100%. However, purchases made after 31 March 2003 will only attract capital allowances of 40% in the first year, as the tax break was introduced for a limited three-year period.
Gordon Brown introduced the 100% relief in the 2000 Budget to encourage small enterprises to invest in IT and to embrace e-commerce.
Recent DTI sponsored research (Harvard Business School) branded the failure to invest in IT as a major contributor to the poor productivity rates of UK companies.
It would be a boost for all SMEs if these measures were to be extended in the forthcoming budget. Nevertheless, firms should act sooner, rather then later, on any high-tech investment – or miss out on substantial tax savings.
Qualifying expenditure includes computers and associated equipment (including cabling), computer software and equipment such as third generation mobile telephones and wireless application protocol (WAP) telephones.
In order to qualify for the tax relief, small businesses must meet two of the following three conditions: turnover does not exceed £2.8 million; assets do not exceed £1.4 million; number of staff does not exceed 50.
