DUNCAN MEREDITH, of Garbutt & Elliott of York, looks beyond Gordon Brown's Budget speech to the small print, and asks: What does this mean for us?

THIS was a borrower's budget, well-packaged in the year before an election, but how did we in York and North and East Yorkshire fit into the picture?

There were many measures that will affect local businesses. Yet to be assessed is the effect of the new tax on dividends, where the company starting rate of zero per cent will only apply to retained profits.

There may be a scramble to pay company funds out as dividends before April 1. However, incorporation should still benefit many traders, even though some business people will wonder: "Why the tax grab when the Chancellor himself only introduced the relief two years ago?"

It was particularly disappointing that Mr Brown did not choose to help unincorporated businesses by extending the tax breaks that companies enjoy.

Small and medium-sized businesses will rejoice in the news that more of them will obtain the 40 per cent (now to be 50 per cent) deduction for capital expenditure on plant and machinery, following the doubling of the relevant turnover and assets limits.

Some small ventures will be disappointed that there was no further extension of the 100 per cent tax relief for computer-related expenditure, although the one-year increase in first year allowances may cushion the blow.

There was good news also in the improvement to the VAT flat rate scheme, which should encourage businesses with turnover of up to £150,000 to take advantage of the administrative savings on offer.

Another fillip, pre-announced, will be the new tax relief for employer-provided child care. This can only help flexible employment opportunities in our region.

The investment outlook for small, growing companies in our region seeking both the money and experience of "business angels" will have improved with the increase in the upper limit for annual subscriptions under the Enterprise Investment Scheme. However, this may be tempered by the effect of the new dividend tax.

A big applause for Mr Brown is expected from those who seek tax credits for research and development (R&D). He has modernised the definition of qualifying R&D and extended the costs which attract the relief. This will especially benefit technology companies.

Also, the proposal to adopt EU recommendations to allow universities to hold more than 25 per cent of the share capital of spin-off companies should fuel growth at the York Science Park.

Greater tax relief for disadvantaged areas will encourage our local builders to get even more involved, especially with the new 100 per cent capital allowances for renovation of vacant business premises.

However, it was disappointing not to hear an announcement of some relief from the high impact of the stamp duty land tax charges on new leases, which were introduced last December.

But there was an announcement of the potential return of Development Land Tax (on unrealised gains on undeveloped land). This will set alarm bells ringing in all corners of the property sector.

The Chancellor confirmed a number of anti-avoidance measures. New rules will allow the Inland Revenue to bring in new controls on transfers of cash between organisations within the same group. This could have a significant impact on some of our biggest employers, like Nestl, as it will now affect transactions between its UK subsidiaries.

As ever, the detail of the small print remains to be digested. Overall, the proliferation of new taxes and some increases in the burden of tax may be bad news but some of the new quite generous reliefs will be worth making the effort to investigate. Local churches, for one, will be offering a prayer of thanks for the new, full refunds of VAT on repairs.

Updated: 12:06 Thursday, March 18, 2004