BDO reacts to measures to assist small and medium sized companies (small companies rate)

Stephen Herring, Tax Partner, BDO, commented: 

"These are indeed extraordinary times when the Chancellor is obliged to make a further change to plans he only confirmed in the Budget earlier this year.  We welcome the freezing of this tax increase but we suspect that he will not have forgotten his, and his predecessor's original motive in proposing the increase which was to tackle perceived tax avoidance by personal service companies, for example in the IT sector, which he regarded as undertaking unacceptable tax avoidance by restricting remuneration and funding lifestyle by substantial dividend payments thereby saving national insurance.  I suspect the Chancellor's retreat on this measure will not be matched by HMRC accepting that the arrangements are now acceptable."

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For more information, please contact Matthew Longbottom at BDO on 020 7893 2717, 0797 619 8786 email matthew.longbottom@bdo.co.uk

Notes to editors:

BDO LLP operates across the UK with over 3,000 partners and staff. BDO LLP is a UK limited liability partnership and the UK Member Firm of BDO International. BDO International is a world-wide network of public accounting firms, called BDO Member Firms, serving international clients. Each BDO Member Firm is an independent legal entity in its own country. The Belfast Firm is operated by a separate Partnership.

BDO LLP and BDO - Belfast are both authorised and regulated by the Financial Services Authority to conduct investment business.

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• Best Workplace UK - Financial Times 2008
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• Audit Team of the Year – Accountancy Age Awards 2008
• Tax Team of the Year – Accountancy Age Awards 2008
• Corporate Finance Deal of the Year – Accountancy Age Awards 2008
• Employer of the Year – Accountancy Age Awards 2007
• The Women of Achievement Award –  Women in the City 2008
• Top 50 Where Women Want to Work - The Times 2007
• Business Superbrand - Business Superbrands 2008