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March 23, 2005
Small Business: Now That The Chancellor's Red Book Has Been Laid To Rest
It should come as no surprise to small business owners that While the Chancellor had talked much about cutting red tape prior to the budget many of the measures announced in the budget had already been mentioned in previous budgets or were merely proposals for consideration.
On the plus side for small businesses was the acceptance by Gordon Brown of the finding of the Hampton review into red tape, which will reduce the number of agencies that carry out small businesses inspections from 35 to 9.
In real terms, Gordon Brown claim that this will result in 1m fewer inspections.
David Brown of the Federation of small business said, "Hampton recommendation is an important start in tackling the burden of compliance faced by small businesses".
The Association of Chartered Certified Accountants (ACCA) also welcomed Hampton recommendation but they warned that small businesses would only see the benefits in the long term, as the initial cost of change will be substantial.
Gordon Brown also stated in the budget that small businesses would no longer have to file separate VAT and company tax return and that this was out for consultation to the Inland Revenue and Custom And Excise.
supporting this initiative, the Chancellor plans to create a combined Inland Revenue and Customs department as a single point of contact for small businesses.
The general belief is that this initiative is a long way off from being a reality. A view supported by David Bishop and Mike Warburton, tax partner in Grant Thornton who says "even if it happens, it could be problematic for small businesses that don't have an expert on site in direct and indirect taxation.
Gordon Brown introduced a timetable for the introduction of cutting red tape surrounding working tax credits. The Inland Revenue rather than employers will made direct payments. This will reduce payroll burdens faced by small business owners.
The Chancellor also announced proposals to extend research and development tax credits available to small business but he gave no detail about how this would work.
At present the process of claiming research and development tax credit is cumbersome so this should make it easier for small businesses and business generally to get the relief.
This sums up the proposals announced by the Chancellor in the budget. The overall feeling among small businesses was that the budget was neutral and that this was all that could be hoped for.
David
Small Business Resource
Posted by David at March 23, 2005 9:04 AM
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