MICHAEL Donaldson, executive chairman of family-owned timber merchant James Donaldson & Sons, approached the Budget hoping Rishi Sunak would resist the temptation of heaping taxes on business and households before they had the chance to recover from the pandemic.
And by and large he feels the Chancellor achieved that, albeit he says the hike in corporation tax from 19 per cent to 25% from 2023 will be a “big jump” to handle, writes Scott Wright.
James Donaldson, which can trace its roots back to 1860, employs 1,019 people. It is one of the UK’s largest importers and distributors of timber, much of which is supplied to the housebuilding sector.
Given its size, the firm would be eligible to pay the 25% rate of corporation tax when it is introduced. Mr Donaldson said the scale of the rise in corporation tax was unexpected, but took succour from the fact businesses have been given time to prepare for it.
“To go from 19% to 25% in one go is a big a jump, but on the plus side it is 2023,” he told The Herald. “We know when it is coming and we can plan accordingly.”
Mr Donaldson also welcomed the “super-deduction” that will allow companies investing in new equipment to claim back a higher percentage of taxable profits for the next two years, particularly as James Donaldson is planning expenditure in “kit and equipment in the relatively short term”. But he cautioned that the “devil with these things is always in the detail”.
With the company earning one-third of its revenue in England, he was pleased to see further support for the housebuilding sector, including the extension of stamp duty relief. The £500,000 nil rate band will now end on June 30 instead of March 31, before being reduced to £250,000 until the end of September, and then cut to its usual level of £125,000 on October 1. Mr Donaldson said the new government-backed scheme to help house-buyers secure 95 per cent mortgages would maintain momentum in the housebuilding sector.
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