Financial Resolutions, 1978: Financial Statement, Budget, 1978. - Small companies
—Corporation tax thresholds
I have been very conscious of the need to do everything possible to help small firms. It is most desirable that the possibilities for growth of small firms be fully exploited to the national advantage. A number of them already engage in exporting and I am anxious to see more of them becoming export-orientated. These firms at present account for a substantial part of employment in manufacturing industry and the possibilities for future job-creation will be clear.
I propose to raise the present corporation tax thresholds for small companies from £10,000 and £15,000 to £25,000 and £35,000, respectively. The revised thresholds will be for the purpose of applying the 35 per cent to 45 per cent range of rates and the 45 per cent rate, respectively. In order to give a useful boost to the companies' cash position in 1978 by reducing their current tax payments in respect of 1977 profits, I propose to backdate the increase in thresholds to profits from 1 January 1977. The cost to the Exchequer is £400,000 in 1978. I am confident that this will provide a welcome stimulus to small companies.