Small businesses will benefit, but entrepreneurs will suffer. That was the mixed response from business lobby groups yesterday after Darling delivered his Pre-Budget Report.
Patrick Stevens tax partner at Ernst & Young said the deferral on the small business rate of corporation tax will ease the burden for small businesses, as will the small loan guarantee scheme.
However, he was sceptical about affect on entrepreneurs: "The message to entrepreneurs seems to have changed over the last three years from ‘all systems go’ to ‘go away’. A combination of higher income tax on earnings, higher capital gains tax on successful businesses, and last year’s changes to the non domicile regime means that entrepreneurs will feel less and less welcome in the UK.”
Stephen Robertson, director general of the British Retail Consortium was similarly positive on the PBR impact on small business: "This will be especially welcome for small businesses who find managing their cashflow particularly difficult. Along with provision of small business finance and the ability to offset losses against profits made in the last three years this will provide useful help for smaller retailers."
But David Frost, Director-General of the British Chambers of Commerce was more pessimistic, saying that despite improvements to small business taxation, and loans, the PBR was not without its faults:
“There are a few good announcements in there like deferment of the Small Business Rate of corporation tax, allowing businesses to spread out the payment of their tax bill, and the new business finance scheme.
“But the proposal to increase National Insurance Contributions is wrong. At the very time when the economy should be coming out of the recession, businesses will face an extra tax on employing people.”
For information on how the budget will affect your business go to www.direct.gov.uk/PBR?CID=PR
© Crimson Business Ltd, 2008
