The Chancellor certainly made life difficult for the headline writers – The Credit Card Budget being the most memorable phrase used after March 19. But nobody expected any dramatic measures to be announced with a general election on the horizon, especially from a Chancellor who has a habit of introducing subtle taxation changes that have often been programmed to take effect months or years later.

The usual adjustments were there: VAT registration thresholds, tobacco and fuel duty, company car fuel scale charges, as well as some tinkering with more obscure items such as the benefit charges for employees provided with vans for private use, and the tax treatment of ‘demonstrator’ vehicles in the motor trade. On the more positive side there was an incentive for small businesses to invest in plant and equipment, by raising First Year Capital Allowances from 40 per cent to 50 per cent for one year, from April 2004.

But in reality these measures were largely in line with inflation and could hardly raise much excitement even among opposition politicians – Gordon Brown was not likely to give his political enemies vast amounts of ammunition at this stage of the campaign.

Read behind the headlines, however, and there were measures that will possibly prove to be significant to the small/medium business sector. The underlying theme of the Budget was one of closing tax avoidance and evasion loopholes. For example one of the items in the Treasury’s tax brief was: “The Government will take steps to reinforce compliance with the tax system by the smallest companies, while ensuring that compliant businesses do not face additional burdens.

“The measures announced today are: a minimum corporation tax rate of 19 per cent on profits distributed to individuals on or after April 1, 2004, with the zero-rate on retained profit remaining to incentivise businesses to re-invest; the requirement for newly incorporated businesses to disclose basic tax information will be strengthened; the Government will also consider measures to strengthen anti-avoidance legislation on loans made to shareholder directors of close companies.”

It may not seem much, but it could make a difference to someone starting a business who has to decide whether to set it up as a sole trader or a limited company. The measures will remove some of the attractiveness of setting up a limited company, at least to those who saw that route as a means of reducing their exposure to taxation. For existing businesses there are implications in respect of the decision whether to pay shareholder-directors by dividends or salary, and on the status of directors’ loan accounts.

Another relatively muted announcement in this Budget was the introduction of Duty Stamps on spirits and certain fortified wines. As with the existing scheme for tobacco, retail containers of these products will have to bear a stamp confirming that UK Duty has been paid on them. A range of offences and penalties will also come into effect for any retailers who are tempted to sell alcohol from dubious suppliers.

Above all, there was one announcement in the Budget that is likely to have a very significant long-term effect on all businesses in the UK – the proposed merger of the Inland Revenue with Customs & Excise. Traditionally these two branches of government tax collection and enforcement have been fierce rivals. And despite some of the more paranoid conspiracy theories out there, have only recently begun sharing information from the huge databases that each maintain with data from every business in the country. It will no doubt take several years to implement the merger, but as they come together a great many anomalies will come under scrutiny. To give a simple example, there are traders out there who the Revenue have treated as partnerships – often husband and wife – for tax purposes, but as far as Customs are concerned, are known only as sole traders for VAT purposes. Eventually the new tax agency will come knocking on their door to find out exactly what the real trading status is, and depending on the outcome, that could lead to some serious re-calculation of tax liabilities. Likewise, if some ‘dodgy’ accounting has been taking place, particularly between quarterly VAT returns and annual tax computations, in the future there will be fewer places to hide the differences.