text_body: --- DIVISION TITLE ---
  
  Budget Resolutions 2004 - Non-Corporate Distribution Rate
  
  --- MOTION EFFECT ---
  
  The majority Aye voters agreed to introduce a 'non-corporate distribution rate (NCDR)'[1].
  
  This rate "ensured that where a company paid below the small companies' [corporation tax rate][2] (19% in 2004), dividend payments made to non-corporates (for example, individuals, trusts and personal representatives of deceased persons) would be subject to additional corporation tax, bringing the corporation tax paid up to 19%. For example, a company making Â£10,000 profit, and making a Â£6,000 dividend distribution to an individual and Â£4,000 to another company would pay 19% corporation tax on the Â£6,000."[3]
  
  The background to this measure is the starting rate for corporation tax introduced by Gordon Brown in his 1999 budget[4]. This meant companies who made a profit between Â£0 and Â£10,000 per year were taxed at 10% on those profits.
  
  However, in the 2002 budget Gordon Brown reduced this starting rate to 0%[5] meaning, of course, companies with profits of no more than Â£10,000 paid no corporation tax.
  
  Labour wanted to introduce the NCDR because when the starting rate was set to 0% in 2002 this resulted in a large number of small businesses turning themselves into companies[6]. Consequently, many of these businesses were avoiding paying corporation tax. 
  
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  * [1] [http://www.theyworkforyou.com/debate/?id=2004-03-23.818.1 Motion on corporation tax], House of Commons, 23 March 2004
  * [2] Small companies' corporation tax rate is set for companies whose profits are less than Â£300,000 per year
  * [3] [http://en.wikipedia.org/wiki/United_Kingdom_corporation_tax#Rates Wikipedia entry], retrieved on 2010-02-27
  * [4] [http://www.opsi.gov.uk/acts/acts1999/ukpga_19990016_en_4#pt3-pb3-l1g28 Finance Act 1999, Section 28]
  * [5] [http://www.opsi.gov.uk/acts/acts2002/ukpga_20020023_en_5#pt3-ch1-pb2-l1g32 Finance Act 2002, Section 32]
  * [6] [http://news.bbc.co.uk/1/hi/business/3535749.stm BBC News], 16 March 2004
  
  
  
  --- COMMENTS AND NOTES ---
  
  (put thoughts and notes for other researchers here)
  