IT tax break expires at midnight

Today (March 31) is the last chance for small firms and the self-employed to use tax breaks to cut the cost of buying computer hardware and software.

Small to medium-sized enterprises can currently offset 100 per cent of the cost of buying computer hardware and software, including website set-up costs, against their tax bill in the first year. In last year's Budget, the Chancellor extended this provision to run until March 2004.

There were hopes that this year he would extend it further. But there was no such announcement in the Budget and this allowance will expire at midnight. So from April 1, the maximum that can be offset will be halved to 50 per cent of the cost of the goods.

Stuart Riddell, head of ACCA Scotland, said: "It is very disappointing that the Chancellor has failed to extend for another year the 100 per cent allowances for investment by SMEs in IT - particularly given that capital allowances are very effective for providing investment incentives and helping small firms with their cash flows."

See UKTECH's article Don't miss out on IT tax relief - July 2003.

Dividend tax

The new dividend tax also applies from tomorrow. For details of that see Kevin Miller's story here:

Paying dividends by March 31, 2004