Below is the text of Mr Major’s written Parliamentary Answer on Small Businesses on 20th July 1987.
Mr. David Shaw Asked the Chancellor of the Exchequer if he will make a statement on the achievements of his Department in helping small businesses over the last three years; and if he will publish the performance indicators by which his Department monitors those achievements and the statistical results of such monitoring.
Mr. Major The Government’s economic policy is designed to maintain a vigorous economy in which business and enterprise can flourish. Specific measures helpful to small businesses have been introduced in each of the last three Budgets. These include:
self employed benefit from continuing reduction in Class 2 NIC and tax relief on half Class 4 NIC;
extension of business expansion scheme (BES);
reform of capital gains retirement relief, extension of indexation, relief for long term holdings;
VAT threshold increase in line with inflation, extension of bad debt relief;
abolition of development land tax;
unincorporated businesses share benefit of real increase in income tax thresholds.
small companies’ corporation tax (CT) rate reduced to 29 per cent.;
unincorporated businesses benefit from basic rate cut to 29 per cent. and indexation of tax thresholds;
BES extended and targeting improved;
Inheritance tax exemption for lifetime gifts;
VAT registration and deregistration thresholds increased broadly in line with inflation;
Enterprise allowance scheme expanded;
Employee share schemes: improved access for unquoted family companies, employee controlled companies, worker co-operatives;
Loan guarantee scheme extended and premium halved.
small companies’ CT rate reduced to 27 per cent.;
unincorporated businesses benefit from income tax basic rate cut to 27 per cent. and indexation of the tax threshold; package of measures to lighten VAT burden on small businesses including: cash and annual accounting for businesses with turnover up to £250,000; registration threshold increased to £21,300 and period in which 73 businesses obliged to register extended to 30 days, simpler schemes to he more widely available for small and medium sized retailers;
standstill in fuel duties and most vehicle excise duty rates; BES changes to reduce effect of investment bunching in last quarter of tax year;
small companies’ capital gains charge reduced to 27 per cent. with advance corporation tax offset against liability on gains;
ceiling for capital gains retirement relief increased to £125,000;
Inheritance tax (IHT) business relief increased from 30 per cent. to 51) per cent. for minority holdings over 25 per cent. in unquoted companies; IHT threshold increased; new simplified occupational pension schemes will help small employers set up own schemes.
The success of the Government’s policies to improve the climate for small businesses is indicated by the rate of net business startups which, on the basis of VAT registration, averaged around 500 per week between 1980 and 1985.