Chancellor closes VAT-free internet loophole; extends small business relief rate.
George Osbourne has announced a number of measures designed to help businesses in the UK in yesterday's budget.
Osbourne said he was looking to boost enterprise and exports as part of a budget 'for making things.'
The VAT loophole, which allows goods under £18 to be purchased and imported from outside the EU, to qualify for a VAT waiver, will be closed.
The loophole has meant that, with the rise of internet retailing, many consumers have been bypassing High Street retailers in favour of cheaper online deals.
Osbourne said the £18 threshold will be reduced to £15 from November and promised that the Government would 'explore options' in Europe 'to limit the scope of the relief so that it can no longer be exploited for a purpose it was not intended for.'
The Small Business Relief Rate has also been extended for another year to October 2012, at a cost of £370 million. This means that 300,000 small companies will pay no business rates for another year.
David Frost, director general of the British Chambers of Commerce, said: "Extending the small business rate relief holiday for another year will give many small and medium enterprises greater confidence and allow them to invest in growth rather than pay more to the Exchequer".
Meanwhile, the Entrepreneurs Relief Scheme, which offers capital gains tax reliefs to SME's will be doubled to £10 million from early April.
Osborne also said investors into start-up businesses would, from April 2012, be able to put as much as £1m into an Enterprise Investment Scheme (EIS) each year with tax relief, which is a rise from the current £500,000 limit.
Investments currently offer tax relief of 20 per cent after the investment has been held for three years. This will rise to 30 per cent under the new regime.