Vol. 510 No. 5
116 Mr. Creed asked the Minister for Finance the overall impact assessment, if any, his Department has carried out on the business expansion scheme and, in particular, the impact of the £250,000 threshold and its consequences for planned projects; and if he will make a statement on the matter. [23057/99]
The Finance Act, 1998, reduced the aggregate amount that a company could raise under the business expansion scheme, BES, from £1 million to £250,000. The BES limit was reduced to refocus the relief on start up/smaller companies which find it hard to raise finance elsewhere. This was the original intention of the BES. It was also to reduce the growing cost of the relief to the Exchequer.
The BES was due to finish on 5 April 1999. A paper prepared for the tax strategy group, in October 1998, concluded that information was not yet available to determine what effect the reduction in the aggregate amount a company could raise under the BES actually had on the scheme. However, initial indications were that the budget day changes had the desired effect in focusing the BES on smaller/start up companies. The Finance Act, 1999, extended the BES to 5 April 2001. The scheme will be reviewed again before any decision is taken on whether to extend it beyond 5 April 2001.
