Chancellor Gordon Brown produced a cautious, and what he hopes is a vote-saving Budget.

On the face of it this was a straightforward Budget. However, as always, the details behind the proposals will show that the Budget was actually more complicated than it first seemed.

How are our businesses affected?

When Gordon Brown first introduced the zero per cent tax rate for small companies he said he was trying to "incentivise" them. Apparently this incentive has now become a loophole!

In the Budget he revealed his proposals to close the loophole whereby funds are withdrawn from small companies by paying dividends rather than paying salary.

If your company profits are in excess of £50,000 then the company is not affected. If, however, your company's assessable income is less than £50,000 then your business will have to pay 19 per cent tax on any dividends paid.

The Budget also targeted married couples who jointly own shares in a company.

As from April 6 dividends have been taxed according to the actual proportions of ownership and entitlement to the income.

In other words businesses, where one spouse does not really have an involvement in the running of the business, will be at risk.

There are tax planning opportunities available and detailed advice is needed on the way forward.

The Chancellor also announced that by 2006/07 he would be spending £20 billion more in key departments. I estimate that in Yorkshire and Humberside this means we need to generate £1.7 billion more cash for the Government in order for this to happen. One option is he can tax us more - however, I believe we need to focus on helping businesses to grow and to create more jobs, profit and wealth!

Growth doesn't happen by accident - we have to take action to make it happen. This is where your accountant can really make a difference.

Part of the accountant's role is to look at historical data, however more and more we are asked to assist in looking forward. Decisions that are made now will affect results in the future.

This is why I believe business planning plays an important role in every venture - subject for a discussion next month.

My final thought comes from business guru Tom Peters - "If you don't do something, things won't get better."

Updated: 13:23 Tuesday, April 27, 2004