§ Mr. PollardTo ask the Chancellor of the Exchequer what plans he has to extend to unincorporated small businesses the new lower 10 per cent. starting tax rate levied on the initial £10,000 business profits. [122357]
§ Dawn PrimaroloUnincorporated businesses are subject to income tax whereas small companies are subject to corporation tax. Income tax rates are applied to total income from all sources; therefore profits from unincorporated business activities are aggregated with an individual's other income, and the appropriate rates charged after deduction of personal allowances. A 10p income tax band was introduced in Budget 1999 and increased in Budget 2000. As with the whole tax system, this band is kept under constant review. Any future changes will be announced in the normal way.