Nearly four million small businesses will be able to claim tax breaks on IT investments under the chancellor of the exchequer's new budget plans.
Promising to make the economy "more flexible" and firms "better equipped", chancellor Gordon Brown confirmed that the qualifying threshold for small business tax is to be raised to £20m.
This increases to 3.7 million the number of firms that are able to claim the 40 per cent investment tax allowance. For investment in IT, the 100 per cent first year capital allowance has been extended until 31 March 2004.
The threshold for tax breaks on investment in research and development (R&D) is to be reduced to £10,000. Last year, the chancellor introduced the R&D credit to encourage innovation.
Small businesses are also to get help through an online training portal, to be set up in partnership with banks.
Business lobby group the Confederation of British Industry (CBI) welcomed the measures.
"[The chancellor] has turned to more creative ways for improving the overall performance of the economy, especially productivity and investment," said Digby Jones, director general of the CBI, in a statement.
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