Martin Bell, Head of Local Business in Bradford for Barclays, writes: All the comment surrounding the Chancellor's budget has concentrated on the health service, but Gordon Brown's sixth budget also helps frame the enterprise agenda for the next few years and will be of interest to all those running a business or in the enterprise support community.

Overall, the Chancellor's economic forecast will be of some comfort to the business community as it points to a fairly upbeat view of growth, albeit with the prospect of higher interest rates, especially later this year and into 2003.

The Chancellor confirmed the Government's aim of encouraging enterprise, notably through a rise in the number of business starts throughout the UK. However, it's worth remembering that, at the present time, the number of businesses in the UK is falling and, according to Barclays' estimates, the business formation rate per head has fallen each year for the last four years.

All firms will welcome the cut in the small company rate of profits tax, but it is worth remembering that to benefit you have to make a profit. Also, it will not apply to the self-employed, who make up more than two-thirds of all small and medium enterprises (SMEs). Moreover, all employers will have to pay more to the Government from 2003.

The one per cent rise in National Insurance for a typical small firm with three staff will be about £600 a year - more than twice what a small firm typically pays the bank for money transmission charges over a year.

It is clear the Chancellor has tried to balance the need to raise revenue and encourage an enterprise economy. However, our initial assessment is that, for the majority of small businesses, the tax burden will rise over the coming years.

As ever, the Budget contained a large number of measures and in many cases the full details take time to emerge. However, the key measures for small business would appear to be the following:

Treasury growth forecasts are 2 to 2 per cent for 2002, 3 to 3 per cent for 2003 and 2 to 3 per cent in 2004. This represents a more upbeat assessment for the later years and suggests that small firms will have a better 2002 than was expected at the turn of the year, although interest rates are likely to be higher than previously expected.

Measures outlined in the speech include:

Small Companies corporation tax rate falls from 20 per cent to 19 per cent from 2002-03 tax year (affecting 335,000 companies in the UK, out of 1.4 million, and excluding completely the four million self-employed)

Corporation tax removed for taxable profits of less than £10,000, benefitting 150,000 companies

l Corporation tax relief for purchase of intellectual property, goodwill and other intangible assets

Capital Gains Tax on disposal of business assets reduced for the self-employed, to 20 per cent after one year and 10 per cent after two years of holding

Optional flat-rate VAT scheme for small firms - a proportion of turnover in place of individual accounting for VAT liable sales and purchases, available to firms with less than £100,000 turnover this year and £150,000 from 2003.

VAT threshold rises to £55,000

From 2005-06, employers with more than 50 staff will have to 'e-file' their returns, with all firms having to from 2009-10.

Under Invested Communities

The Chancellor confirmed the introduction of a Community Investment Tax Credit worth 25 per cent of the initial investment in a designated recipient.

In addition, Stamp Duty will be removed from all commercial property transactions taking place in 2,000 designated 'enterprise neighbourhoods' from 2002-03.