§ Mr. RoweTo ask the Chancellor of the Exchequer what would be the cost to the Exchequer of introducing a nil rate corporation tax band on the first £5,000 of a company's profits; and what would be the cost if it were to be introduced(a) for companies in the first five years from registration for value-added tax and (b) for non-registered companies.
§ Mr. LilleyOn the assumption that a single £5,000 nil rate band would be available to a company group and would be divided equally between the members of the group, the direct revenue cost is tentatively estimated at some £100 million. This estimate is based on the existing distribution of taxable profits and therefore excludes the effect of behavioural changes. These cannot readily be quantified but they are likely to have a further very substantial effect upon revenue. I regret that information required to provide estimates under conditions(a) and (b) is not available.