Lobby asks for tax relief in pre-budget report

The submission, by the Federation of Small Business (FSB), calls for Chancellor Gordon Brown to recognise the difference between large and small businesses when considering taxation in the up and coming pre-budget report.

The FSB also argues that the review is an opportunity to overhaul VAT, a particular concern of small businesses during the past year and to re-introduce the 100 per cent first year allowance for IT.

The Capital Allowance scheme, which ended in March 2004, entitled small businesses, as well as start-ups, to qualify for 100 per cent tax relief on IT purchases.

Neil Hamper, tax chairman for the FSB, said: “Whether this review is an opportunity or threat to the UK’s 4 million small businesses currently hangs in the balance. It will come down to whetehr the Chancellor is prepared to engage in a real debate that addresses the underlying problems.

“If he does then this is a great opportunity to deliver the simplification and stability that small businesses need. But there is a real danger of another knee jerk reaction and yet more tweaks that will lead to more confusion or at worst higher tax bills for Britain entrepreneurs.”

The FSB is also calling on the Chancellor to announce the Government’s response to three major reviews:

• On the Gershon review into public sector efficiency - the FSB is looking for assurances that any government drive towards cutting costs will not undermine moves to improve access to contracts for small businesses.
• On the Hampton Review into inspection and enforcement - the FSB is calling for the Government to introduce a generalist inspector and for reforms to encourage firms to seek help without fear of reprisals.
• On the Graham Review into the Small Firms Loan Guarantee - the FSB is calling for the speedy implementation of the recommendation to allow lending institutions, not the DTI, to make decisions regarding loans.