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The Chancellor came under attack from business groups and
MPs for sparking a 20 per cent drop in the number of new companies
being formed. A new tax launched in the Budget is being blamed.
Critics warned that the huge fall in the number of companies
registering would inhibit the ability of young businesses to
expand, by limiting access to bank finance and increasing their
financial risks.
The protest followed the release of figures from Companies
House showing that the numbers of new companies registered between
late March and May fell to 44,450. The corresponding number last
year was 57,000.
The fall was blamed by accountants on a small business tax
introduced in the March Budget. The tax, effectively a 19 per
cent corporation tax on dividends, significantly lessened the
former generous tax advantages for small company owners.
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