A brighter picture for small quoted companies could emerge in this year’s Budget with numerous measures to ease their plight, tax experts said this week.
Depressed valuations on the stock market mean the Chancellor, Gordon Brown, is likely to introduce tax relief to help small quoted companies raise more capital both by reducing costs and through measures to increase the liquidity of their shares.
This would reverse the impact of recent changes to reinvestment relief rules which adversely affected the small companies market, according to accountant KPMG.
Ian Barlow, KPMG’s head of UK tax, said the advent of the euro meant it was even more important that the subdued smaller companies market is boosted as institutions will tend to focus on the top stocks in Europe now as well as the UK.
Other tax experts are pinning their hopes on raising the small companies threshold for the rate of corporation tax.
The last increase was in 1994 when it was raised to £300,000, but the British Chambers of Commerce (BCC) said it is now time to go to £500,000.
Charles Rose, chairman of the BCC’s Budget working group, said this would help produce a more balanced Budget.