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Budget Statement 2004: Summary of Small Business Announcements - |
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Budget Statement 2004: A Summary of the Small Business Announcements
Encouraging a More Dynamic StartUp Market
A thriving and dynamic small business sector is key to economic flexibility as new businesses bring new or improved products and services to consumers, increasing competition and challenging existing businesses to improve their own performance. The Budget will make it easier to start up:
- The growth in small owner-managed businesses, as well as the changing nature of employment and contractual relationships, is creating challenges for the definitions and boundaries in the tax and national insurance systems between income from self-employment and the remuneration of owner-managers. The government therefore proposes to consider the strategic issues raised by these developments, to ensure that the tax system reflects the realities of today's changing labour market and business environment. A discussion paper will be issued at the time of the 2004 Pre-Budget Report.
- The government is concerned about the increasing numbers of self-employed individuals adopting the corporate legal form. With effect from 1 April 2004, the government will therefore introduce a 19% minimum rate of corporation tax on distributed profits. This measure will ensure that corporate tax rates lower than 19%, including the zero rate of corporation tax introduced in April 2002, remain available to small companies as they re-invest in their business. Businesses re-investing their profits, or companies with taxable profits above £50,000, will be unaffected by this measure.
- The new Businesslink.gov.uk website includes a new online training directory to help people thinking of starting a business, or in their first year of trading, to access training in order to innovate, improve, grow and be more competitive. It will offer a choice of online courses provided by learndirect and a directory of other courses across the UK. It will be promoted to business customers by banks and the Business Link network.
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