Following a business breakfast meeting on Monday with the new Trade and Industry secretary Patricia Hewitt, and the Education and Skills minister Estelle Morris, Gordon Brown announced a raft of measures designed to reinforce the government's support for small businesses and entrepreneurs.
Many of the proposals announced by the Chancellor yesterday were originally announced in March's budget, but failed to make it to the statute book before the General Election. Mr Brown stated that the 'Enterprise for all' bill, which will be officially unveiled in the Queen's speech on Wednesday, is intended to: 'create in Britain a true enterprise culture where the chance to start and succeed in business is genuinely open to all.'
Proposed changes included a reduction, based on the US model, of Capital Gains Tax rates for business assets to 20% after they have been held for one year, and to 10% after two and all subsequent years. The Chancellor also announced that in his 2002 budget, the 10% corporation tax band would be extended, in order to reduce the tax bills of more small businesses. A consultation paper was issued on Monday regarding the introduction of a flat rate of VAT for SMEs in order to reduce their tax and compliance burden.
Other measures discussed included the extension of Enterprise Management Incentives to larger companies, a review of the long term retail savings industry led by Ron Sandler, and a review of payroll services to small businesses. Mr Brown also indicated that there would be a crackdown on companies operating illegal price fixing cartels, with the possibility of prison sentences for directors of guilty companies. Later this month, the Treasury plans to introduce a consultation paper on changes to the UK tax regime designed to lure more multi-national companies to Britain.
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