The Association of British Insurers (ABI) has welcomed changes announced in this year's Budget that make it easier for insurers to invest in venture capital.

The ABI had lobbied Paul Myners during the compilation of his report on institutional investment, released on March 6, for less bureaucracy in venture capital purchases.

ABI investment affairs manager Michael McKersie said it appeared the government had taken Myners' advice.

“At the moment it's incredibly bureaucratic, McKersie said.

“This will allow the tax to be paid on the receipts by insurers, rather than on their underlying interest in the earnings.”

McKersie said the changes would not make much financial difference to insurers, but would save time: “This will take away an impediment,” he said.

The ABI has also welcomed the abolition of the minimum funding requirement (MFR) for occupational pension schemes.

Overall, the Budget left general insurers unscathed. Fears that there would be a rise in insurance premium tax (IPT) or the imposition of other taxes, such as the claims provisions tax last year, were unfounded.

The ABI would have preferred the MFR to be replaced with a common, but flexible, funding standard, rather than a scheme-specific standard.

However, it said it was pleased the government had taken its opinion into account.

For business generally, the government will open consultation on a proposed tax credit for large companies' research and development costs.

Pricewaterhousecoopers (PWC) said the consultation was potentially the most significant business tax measure in the Budget.

It was designed to extend the relief introduced by the Finance Act 2000 for small and medium-sized businesses.

There will be further consultation on a deferred relief for gains arising on disposals of substantial shareholdings by UK companies. And there will also be consultation on intellectual property.

There have also been amendments to the Act's new rules for double tax relief, to come into effect in this month, which PWC said would address some of the concerns expressed by multinationals.

For smaller businesses, the government has promised to hold consultation on using annual accounts as the basis for com-

puting tax.