The Forum of Private Business has welcomed the measures on tax and finance in today’s Budget statement, but insists the smallest firms must benefit from new National Loan Guarantee and Business Finance Partnership schemes
It sees everal measures on taxation as steps towards creating a tax system conducive to small business success, rather than a barrier to it.
The Forum’s chief executive, Phil Orford, said: “The overall verdict is that there have been some tentative steps in the right direction, and perhaps the beginnings of a road map for the future – but for the next year or two, when many of these policies kick in - what small businesses and the economy need are confident strides forward now. Largely, that has not happened in this Budget.
“We saw nothing on reducing the mounting burden of business rates or fuel duty via cuts and a real stabiliser to regulate prices at the pump. These were omissions – and while the Government is working to improve access to funding and bring down banks lending costs by implementing ‘credit easing’ the National Loan Guarantee Scheme, there are concerns that the smallest firms in most need of affordable finance will miss out.
“Further, we called for tax incentives to pave the way for alternative lenders to compete more effectively in finance markets dominated by the big banks, but there was nothing on this in the Budget.
“Reducing the top income tax rate to stimulate entrepreneurship and continuing to cut corporation tax are much-needed measures and we also welcome the concept of merging income tax and National Insurance as a first step in what looks to be long overdue reforms to the tax system for small firms, but the Chancellor could have gone further to give businesses and the economy a bigger boost.”
Notable tax announcements include continuing to clamp down on tax avoidance, cutting the main corporation tax rate to 22% by 2014 and the Government’s commitment to reforming the tax system to make it simpler for small firms – including exploring merging income tax and National Insurance (NI) and changing tax rules to calculate tax for firms with a turnover of £77,000 on a cash basis.