Pre-Budget Report
PRE-BUDGET REPORT FOR BUSINESS A WIDE-RANGING PACKAGE
Small business received a wide-ranging package of extra finance, including a scheme to spread tax payments and a new three-year loss carry-back rule for losses up to £50,000. In addition, the increase in small companies’ rate to 22 per cent is deferred for a year, to 2010. Corporation tax
Export guarantees
The government will defer the increase in corporation tax for small businesses. Corporation tax for small firms was set to rise to 22 per cent from April 2009 from 21 per cent as part of a staged increase set out in the March 2007 Budget.
Small businesses will gain £1bn in export guarantees from this January through the Export Credit Guarantee Department.
Small and medium-sized enterprises (SMEs) The Chancellor announced he would deliver £1bn of tax cuts through the Small Business Finance Scheme and £2bn of loan guarantees.
Lending to SMEs
Tax repayments There will be an extension of a scheme to help businesses that were previously profitable but are now making losses. Losses of up to £50,000 can be offset against profits made in the past three years rather than just one year.
Foreign dividends
Banks will receive an extra £4bn to help SMEs. The Chancellor said banks should follow the Royal Bank of Scotland’s example of not increasing charges to SMEs.
The Chancellor introduced an exemption for companies’ foreign dividends from tax in 2009, in an effort to allay concerns over proposed changes to taxation of foreign earnings that have led some companies to shift their tax domicile out of Britain.
Business tax repayments
Rates
SMEs will be allowed to spread business tax payments over a period to help to ease cashflow and credit constraints.
Empty commercial properties will be exempt from business rates from 2009/10 if the rateable value is less than £15,000.
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There will be an extension of a scheme to help businesses that were previously profitable but are now making losses.
JANUARY/FEBRUARY 2009