INCREASED SUPPORT FOR SMALL BUSINESSES

Small businesses received a boost today as the Chancellor unveiled a
new plan to help improve efficiency and cut red tape.

The new Small Business Service (SBS), details of which will be
announced by the Secretary of State for Trade and Industry tomorrow,
will:

- give business independent advice and help compliance with
regulations;

- offer a new payroll service to new employers, making it
easier for them to comply with PAYE and NICS.

The SBS will be supported by a three-point plan from the Inland
Revenue and Customs & Excise who are to:

- provide better and more targeted support and assistance to
small businesses with:

- a new business guide, business tax starter pack and guidance
for new employers focussed on helping them with their first pay
day;

- a new Helpline service for new employers offering fast track
support;

- a Customs business support programme for new importers and
exporters.

promote the use of IT by small businesses and encourage electronic
tax returns by:

- publishing a clear national standard for payroll systems
software, to help in tax returns. Consultation between
Government, software producers, tax specialists and business
organisations will start immediately;

- introducing legislation so that businesses will be able to
file their PAYE and VAT returns via the Internet;

- offering a discount on returns filed via the Internet;

- taking initiatives to make it easier for business to
communicate with Government. The Inland Revenue and Customs and
Excise, jointly with other Government Departments and local
authorities, are developing an Internet-based self service
facility offering businesses a single point of contact to
obtain cross-Government information.

provide further support by:

- indexing the VAT threshold at #51,000; and

- extending the quarterly PAYE scheme to benefit an additional
130,000 employers. The threshold for quarterly payments will
be raised from #600 to #1,000 a month saving employers up to
#100 a year.

DETAILS

Better help and assistance

1. Working closely with the Small Business Service (SBS), the Inland
Revenue and Customs will roll out a range of new and improved
services to small businesses and new employers to make it easier for
them to understand what they need to do and encourage them to ask for
help.

2. The SBS will be supported by a new network of Inland Revenue
Business Support Teams. As well as running seminars and workshops,
the teams will get in touch and discuss problems with any business
seeking help within 48 hours of initial contact and will guarantee to
offer a range of options, including a half day visit.

Electronic communication

3. Legislation to allow the Inland Revenue and Customs and Excise to
communicate with taxpayers electronically over the Internet, instead
of on paper will be included in the 1999 Finance Bill. Both revenue
Departments are working towards being able to handle returns in this
format as soon as possible.

4. A pilot of the Inland Revenue's Internet-based self service
facility offering businesses one place to go to obtain or provide
cross-Government information will be developed during 1999/2000.
Customs and Excise are developing an Internet-based system to allow
traders to submit VAT registration applications and changes to their
details. They aim to have an operational trial of this system by
April 2000.

Other measures

5. The Value Added Tax registration threshold will be indexed at
#51,000 this year and Customs and Excise will be working further with
business to explore whether it is possible to cushion the impact of
VAT registration on growing businesses.

6. Employers who currently pay less than #600 a month in PAYE/NICs
can make those payments on a quarterly rather than a monthly basis.
An additional 130,000 employers will benefit from the increase in the
threshold to #1000. The cash flow saving for employers from the
increase is worth up to #100 a year, or around 15% of the costs to
them of operating PAYE/NICs.

7. The Inland Revenue and Customs and Excise are committed to formal
adoption of the Government wide Enforcement Concordat, which sets out
what the citizen can expect when dealing with any arm of Government.
Both Departments are reviewing their Charters and extensive Codes of
Practice to ensure they express the principles of the Concordat in
ways that are relevant to their particular work.

NOTES FOR EDITORS

The measures set out in this note are part of a wider productivity
package to help business. Details are contained in a separate
Treasury Press Notice.

Press enquiries to HM Customs & Excise, Public Relations Office, New
Kings Beam House, 22 Upper Ground, London SE1 9PJ.
Telephone: 0171 865 5468/5471

Press enquiries to Inland Revenue
Telephone: 0171 438 6692/6706/7327/7356

Non-media enquiries to Inland Revenue
Telephone: 0171 438 6420/6425

Others should contact their local VAT Business Advice Centre, listed
under Customs and Excise in the telephone book.

Customs and Excise Internet address:
http://www.hmce.gov.uk
Inland Revenue Internet address:
www.inlandrevenue.gov.uk

This news release can also be found at:
http://www.hm-treasury.gov.uk
Other Treasury material can also be found at this address.

# = pounds sterling

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