The 6th December pre-Budget Report (PBR) contained few surprises for the small-business sector. As expected, education emerged as a key priority. There are no short-term fixes, but any success in this area will be of huge benefit to business – there is mounting concern about the lack of basic skills among job applicants.
One of the big PBR stories as far as the SME sector is concerned related to a change that didn’t occur. Business representative groups had expressed hope that the Chancellor would take steps to reduce the complexity of the tax system, and that he would cut the rate of corporation tax businesses pay. These changes weren’t forthcoming.
Among the measures that were announced, those likely to impact on SMEs include the following:
- an increase of 1.25p per litre in fuel duty.
- a fast-track system to help small companies protect their trade marks.
- a clampdown on businesses paying less than the minimum wage rate.
- changes to the way managed-service companies are taxed (full rates of employed tax and NI will now be payable)
- a tightening of VAT record-keeping requirements for both buyer and seller when a business is sold.
The Chancellor also confirmed that a new Construction Industry Scheme (CIS) will take effect in April next year. The revised CIS is intended to reduce the regulatory burden on those using it, while continuing to ensure that all tax obligations are complied with.
For more information, you can visit the PBR 2006 section of the Treasury website
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