The small business package

Corporation Tax
The starting rate is cut from 10 per cent to zero.

Small Companies' rate
Rate cut from 20 per cent to 19 per cent.

VAT registration threshold
Increased to £55,000.

Flat rate
Optional flat rate scheme to allow 500,000 small firms to cut their compliance costs by up to £1,000. It will be extended to 200,000 more small firms with turnovers up to £150,000 next April.

Automatic penalties
For all those firms with turnovers of up to £150,000, automatic penalties have been removed. They will instead be offered help and advice when they are late with their VAT payments.

Bad debts
It will be easier for businesses to join the VAT annual accounting scheme, and to recover VAT on bad debts.

Imports
A targeted scheme to allow approved importers to delay accounting for VAT on their imports will be introduced next year, cutting compliance costs and helping cashflow.

PAYE returns
There will be a three-stage move towards universal electronic filing of employer PAYE returns, with financial incentives to encourage small employers to make greater use of IT.

Venture Capital Trusts (VCTs)
Greater flexibility for VCTs will be provided by enabling VCTs to merge or be wound up without investors losing tax reliefs.

Construction industry
The way in which construction industry scheme deductions are set off against tax liabilities to be modernised during the year.

New research and development tax credit
For large firms, set at 25 per cent.

Transport
Tax relief of 100 per cent for ultra-low emission and electric vehicles.

Capital Gains Tax
From April to be cut from 35 per cent to 20 per cent for business assets held for one year or more, and to 10 per cent for assets held for more than two years.