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Chancellor Gordon Brown is well-known for his commitment to 'prudence'. In previous Budget speeches he has emphasised this commitment literally dozens of times. Tellingly, in this year's Budget – delivered on Wednesday 9 April – the term 'prudence' was mentioned just the once.

In truth, this year's Budget is noticeable for the absence of any new spending cuts or tax rises. Cynics will say that the latter were already more than provided for by the measures announced in last April's Budget, which only begin to kick-in this year of course. Chief among them is a huge increase in National Insurance contributions, which is scheduled to bring in around £8 billion more for the Exchequer in the new tax year.

Uncomfortable though they will undoubtedly be for employers and employees alike, these rises are not likely to prove sufficient in helping to raise Government coffers.

VAT in the 2003 Budget
So what does this year's Budget offer to security businesses? The VAT system has long been a bugbear for smaller companies, and thus a number of changes have been made to the system with this in mind. The VAT registration threshold, currently set at £55,000, is raised – albeit marginally – to £56,000. The optional system whereby firms can pay their VAT on a flat rate basis is extended to those businesses with a turnover of anything up to £150,000.

In addition, as from 10 April automatic fines for the late payment of VAT have been abolished for over 200,000 more firms with a turnover of £150,000 or less. Penalties for late notification will also be reduced.

There is also a major initiative to address the so-called 'equity gap' for smaller security firms. The Chancellor announced the creation of new Small Business Investment Companies, which would expand the availability of start-up finance to new and growing small security firms requiring investment of between £250,000-£1 million. Small Business Investment Companies would raise part of their finance from the capital markets, but would also be able to borrow (on preferential terms) from the Government.

Additionally, nine Regional Venture Capital Funds will be investing up to £270 million in small and medium-sized enterprises across the country, and eligibility for support from the Small Firms Loan Guarantee Scheme will be extended to previously-excluded sectors, including retail.

The previously-flagged increase of the thresholds which define 'small' and 'medium-sized' companies for company law purposes will, when they're eventually implemented, mean that companies with a turnover of up to £4.8 million will be eligible for 100% allowances for expenditure on information technology, and 40% allowances for expenditure on hardware, etc.

Stamp duty on property
Contrary to speculation before the Budget, stamp duty on commercial property is being frozen at current levels. However, Brown announced measures to tackle what he considered to be tax avoidance schemes in the commercial sector.

The Chancellor announced the creation of new Small Business Investment Companies (SBICs), which would expand the availability of start-up finance to new and growing small security firms which need investment of between £250,000-£1 million

Stamp duty will now be charged at 1% on all new leases worth more than £150,000 over the course of their life. Since stamp duty is levied on the basis of one year's rent, the new initiative will more-than-likely encourage businesses to take out shorter leases.

Complaints about the extent of intrusive regulation on businesses are addressed by undertakings to reduce the burden of statistical surveys by the Office of National Statistics, and to bring in a new, simplified guide for smaller security companies on how to comply with the Data Protection Act 1998.

The Chancellor also used the Budget to announce that the Government would be working alongside trade bodies and a number of professional organisations to try to reduce the regulatory burdens on businesses, setting a target of 40 new burdens that will be reformed or abolished over the coming months.

The Government's all-new anti-avoidance initiative, in which £66 million is to be spent tackling fraud and tax avoidance (notice the way in which these terms are bracketed together when one is perfectly legal) in order to collect an extra £1.6 billion in taxes needs to be watched very carefully.

Although this revived 'spend to save' policy is principally aimed at larger security companies, it threatens to drag their smaller cousins into the equation in potentially bizarre ways.

What can we conclude?
The crackdown will probably extend to the avoidance of National Insurance contributions on employment income.

At first glance, this year's Budget seems to be relatively harmless for businesses, but there's enough evidence to suggest that all's not as it might be with the UK economy.