The Pharmaceutical Journal
Vol 276 No 7393 p339
25 March 2006

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Small businesses lose out in Budget announcements

Marginal relief on corporation tax for small businesses with profits less than £50,000 will be abolished from 1 April, Chancellor of the Exchequer Gordon Brown announced in his Budget speech this week.

A nil rate band currently applies to companies with taxable profits up to £10,000, with marginal relief up to £50,000. Companies with profits between £50,000 and £300,000 pay tax at a 19 per cent small companies’ rate, with marginal relief up to £1,500,000. This 19 per cent rate will now be payable on all profit up to £300,000.

Mr Brown also announced that VAT on condoms and emergency hormonal contraception is to be cut from 17.5 per cent to 5 per cent. For public health reasons, the price of cigarettes will be increased by the annual inflation rate, equivalent to 9p per packet, he added.