Other Budget points flagged up by the industry include £50m for a 10-country project across central Africa to prevent deforestation in the world’s second-largest rainforest, plus stamp duty exemption on all new carbon neutral homes up to £500,000 until 2012.
“The reduction in corporation tax is clearly beneficial but it’s not an enormous amount,” said Peter Latham, chairman of James Latham plc. “The reduction in the capital allowances on buildings will hurt us more than we get back through corporation tax.”
Mr Latham also said the freeze on company car tax rates until 2008 would benefits members of staff with company cars.
However, British Woodworking Federation chief executive Richard Lambert said the phased corporation tax increase for smaller firms with annual profits under £1.5m would hit much of the BWF membership,
But he thought this could be offset in the medium term by a new annual £50,000 tax-free allowance for small companies making capital investments.
Paul Hampden-Smith, Travis Perkins group finance director, said the cut in headline rate of corporation tax would have meant a £5m improvement in the company’s annual post-tax profits for last year.
Timber Trade Federation chief executive John White said incentives for building new carbon neutral homes would be an opportunity to “get more wood into buildings”, while £50m towards protecting the Congo Basin rainforest was “laudable”.
