§ Mr. Ashdownasked the Chancellor of the Exchequer if he will list those measures introduced by his Department within the past year and intended to be of benefit to small businesses.
§ Mr. Norman LamontMy right hon. Friend's 1986 Budget contained a number of fiscal measures which are of benefit to small businesses. These were as follows:
- (i) The small companies' corporation tax rate was reduced to 29 per cent. for 1986–87 in line with the basic rate cut.
- (ii) The cut in the basic rate of income tax to 29 per cent. reduced the marginal rates for the majority of unincorporated businesses.
- (iii) The business expansion scheme was improved and its life extended indefinitely thus helping growing, innovative small companies.
- (iv) The abolition of the charge on lifetime gifts between individuals which allows family businesses to be passed on to the next generation free of tax, provided it is done at least seven years before death.
- (v) The reform of the agricultural buildings allowance, which recognised the special position of short-life agricultural buildings or works.
- (vi) The VAT registration and deregistration thresholds were increased broadly in line with inflation.
- (vii) Relaxations in the rules governing employee share schemes which improved access for unquoted companies and worker co-operatives.
- (viii) The treatment of the enterprise allowance as a source of income separate from the takings of the business solved the problem of the allowance being taken into account more than once for tax purposes and made the scheme even more attractive.
Additionally, measures have been taken to ease the burden on businesses arising from the collection of taxes and duties and the control of imports and exports. The Government's White Paper "Building Businesses … Not Barriers" (Cmnd. 9794) lists these measures, which collectively amount to a significant reduction in the demands placed by the Inland Revenue and Customs and Excise on the full range of small businesses.