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Finance (No. 2) Bill

: I considered this matter at the time of the Bill’s Second Reading, and spoke to representatives of the Federation of Small Businesses about it. They advised me that, when the zero per cent. rate was introduced, the number of FSB members that incorporated moved from 27 to 37 per cent., and that it has stayed broadly constant at 38 per cent. since then. Yet in the Red Book, and throughout these debates, this measure has been described as one that tackles tax-motivated incorporation. However, there does not appear to have been a significant shift in the number of FSB members that have incorporated in the past few years. I also note that, in 2007–08 and 2008–09, that will bring the Government a yield of some £920 million—£530 million in 2008–09 alone. Can the Treasury team tell the House how many businesses making a profit of less than £10,000 will be affected and start paying tax at 19 per cent., and how many larger ones will do so? As the provisions are described as tackling tax-motivated incorporation, how many of those businesses, which will now pay but did not do so previously, does the Treasury believe incorporated in the first place to avoid paying tax?