Chancellor announces plans for small businesses
Following the Chancellor's speech on Tuesday, The Inland Revenue has published a report entitled 'Boosting Investment and Growth for Small Businesses', which forms part of the Pre-Budget Report.
According to the press notice, Brown's aim is to provide a 'package of measures to encourage investment and growth in small businesses, helping make Britain one of the most competitive business environments in the world.'
The key components of this 'package', which will be of most interest to small businesses, are as follows:
- an optional flat-rate scheme designed to cut compliance costs for more than 300,000 businesses by up to £1,000 a year;
- changes to simplify and increase participation in the VAT annual accounting scheme, which offers improved cash-flow and lower compliance costs to around 900,000 businesses; and
- the introduction of an outreach business support programme, to offer proactive advice and support to businesses before they get into difficulties;
- further consultation on specific options to simplify the tax regime for small businesses through aligning profits for tax purposes more closely with those reported in their accounts; and
- confirmation of the Government's June 2001 commitment to extend the 10 pence starting rate of corporation tax - the lowest in the European Union - from Budget 2002, to further reduce the corporation tax bills of smaller companies.