Britain’s small businesses gained some breathing space in the Pre-Budget Report. Chancellor Alistair Darling postponed a controversial corporation tax hike for 12 months, leaving it at 21% rather than 22%.
Firms struggling to pay tax bills also had a reprieve. HM Revenue & Customs has been told to allow overstretched companies to spread payments or defer bills for “as long as they need”, says The Daily Telegraph. Each request will be handled on a “case-by-case” basis and most decisions would be made within ten minutes – but interest of around 5.5% will be charged on the money due. A “hated tax hike” on empty properties will also be scrapped for a year, says Becky Barrow in the Daily Mail. Since April, landlords with empty retail and office space have had to pay full rates after three months, or after six months for warehouses and factories. Now businesses won’t have to pay a penny in rates between April 2009 and April 2010 if their rateable value was below £15,000. But critics said this would not prevent bigger landlords from knocking down properties to avoid tax bills.