by Paula Tallon, a partner of BDO Stoy Hayward, chartered accountantThe headline measure in the government’s Pre-Budget Report was the cut in the standard rate of VAT from 17.5% to 15%, which came into effect on 1 December, 2008, and will last until 31 December, 2009.For the baking industry, the amount of extra administrative work will depend on the proportion of sales that are standard-rated. For example, café and coffee shop operators will have to amend all of their menus, price lists, promotional material, tills and accounting records. On the other hand, bakers who do not sell any hot take-away food should have little or no changes to make, while bakery and eat-in/ take-away retailers will have to implement all of the changes in relation to the eat-in/take-away element.Another change allows businesses to carry back trading losses for up to three years, rather than just one year as at present. The proposal applies to companies that suffer a loss in an accounting period ending in the period 24 November, 2008, to 23 November, 2009, or unincorporated businesses that suffer a loss in the 2008/09 tax year.Perhaps the best piece of news for family businesses was the announcement that the ’income shifting’ proposals have been shelved indefinitely. These proposals would have interfered with the way in which family businesses allocate profits, salaries and dividends.The small companies’ rate of corporation tax, that was due to have been increased from 21% to 22% from 1 April, 2009, will not now be changed until 1 April, 2010.