Budget: Small businesses boost from red tape cuts

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Related tags: Small businesses, Tax

Pubs are among a range of small businesses that will benefit from Budget pledges to cut red tape and relieve excessive costs.Chancellor Gordon Brown...

Pubs are among a range of small businesses that will benefit from Budget pledges to cut red tape and relieve excessive costs.

Chancellor Gordon Brown said he would keep his pre-Budget promises to cut red tape surrounding VAT, slash corporation tax, abolish stamp duty and help small businesses get their payroll systems online.

Among the measures he announced last week was a new flat rate calculation for VAT for small firms with a turnover of less than £150,000.

Further reforms will also be made to the VAT penalty regime so that the 700,000 fines automatically imposed on small businesses for late payment of VAT will be abolished.

And he also said that the starting rate of corporation tax would be cut from 10p to zero, with small companies' tax rate cut from 20p to 19p.

Nick Bish, spokesman for the trade's Red Tape Group, welcomed the news. He said: "This is a good Budget for small businesses. We regret that employers' and personal national insurance has gone up by one per cent but are impressed with the focus he is bringing to small businesses in response to our campaign on red tape.

"There are also benefits for licensees such as the freeze on beer, wine and spirits and benefits for microbrewers."

Meanwhile, the government has said it will also invest £40m to help small firms put their tax and payroll systems online as well as an extra £30m so that companies can invest in training schemes such as Investor in People.

More on Budget 2002:

  • Chancellor accused of "conning" beer drinkers
  • PPSs hit by 65 per cent duty rise
  • Responses from the trade

Related stories:

Brewers hope for duty announcement in Budget speech (5 April 2002)

MPs back call for duty cut on small brewers' beers (20 March 2002)

Government confirms sliding scale of beer duty (1 March 2002)

Sussex microbrewer calls for sliding duty (1 February 2002)

Duty cut campaign gathers pace in run-up to budget (18 January 2002)

Related topics: Legislation