AGENTS are concerned over a tax change in the Budget
that will hit small limited businesses.
Chancellor Gordon Brown reversed a decision made two
years ago which encouraged businesses to become incorporated by allowing the
first £10,000 of profit to be paid as a dividend free of corporation tax and
National Insurance.
But now, from April 1, all those in the £10,000
tax-free band – such as small travel agents – will have to pay 19% tax, or
£1,900 if the profit is distributed in full.
Worldchoice chairman Colin Heal said: “The benefits of
changing have been almost completely wiped out.”
ABTA said 75% of members are
limited companies because as sole traders they are liable for any debts if the
business fails.