The Chancellor Gordon Brown could deliver small businesses an early Christmas present by addressing the problem of red tape in his pre-budget report, according to a leading accountancy firm.

PKF is asking the Chancellor to provide a higher degree of certainty for entrepreneurs when he delivers the report on December 2.

Although the introduction of red tape days, both of which are used to deploy business regulations, have been seen as a step forward by many in the business community, PKF believe the government could go much further.

Peter Penneycard, national director of tax at PKF, said: “Whilst the Chancellor constantly refers to economic stability, much of the uncertainty that inhibits entrepreneurs stems from red tape.

“Creating a single government department, the ‘Department of Small Business’ to exclusively regulate small businesses, would give entrepreneurs an easy point of contact with the government.”

With Enterprise Week in full swing, the firm has compiled a wish list of other changes the government must make if it really is to encourage entrepreneurship.

These are:

  • Giving tax breaks to any individuals and their families investing cash in start-up businesses.
  • Exempting businesses under two years old from paying employers National Insurance Contributions (NIC)
  • Widening tax breaks for share incentive schemes to include part time working directors in the case of business angels
  • Building business awareness amongst students by making a business studies module a compulsory component of all university degrees.
  • Encouraging more 14-25 year olds to aspire to start their own business by offering tax breaks helping to repay student loans or tax deductions for costs of education once the business has been set up.

Toby Stephenson, partner at PKF, said: “If the Government is serious about encouraging entrepreneurs and raising the relatively low levels of productivity in the UK, they must give better incentives.

"Building business awareness amongst university students as well in schools will benefit not only benefit existing businesses but, through increasing the number of start-ups, the economy as a whole."

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