§ Mr. David ShawTo ask the Chancellor of the Exchequer what would be the cost to the Exchequer of exempting from corporation tax(a) the first £1,000 of profits and (b) the first £5,000 of profits in respect of (i) small limited companies and (ii) all limited companies.
§ Mr. MaudeOn the assumption that a single exempt amount would be available to a company group and would be divided equally between the members of the group, the direct corporation tax cost is tentatively estimated to be:
Exempt amount Companies liable at the same companies' rate All companies £ £ million £ million 1,000 20 30 5,000 100 150 These estimates are based on the existing distribution of taxable profits and therefore ignore any behavioural changes. These cannot be quantified readily but they are likely to have a further very substantial effect upon revenue.