Small Business Slams Pre-Budget Report

Alistair Darling’s first Pre-Budget Report has not won him or the government any fans among the small business community.  Changes to capital gains tax and the introduction of supplementary business rates have been widely condemned by representatives of UK SMEs.

As mentioned here last week, changes to taper relief on capital gains designed to curb the excesses of private equity firms have been widely criticised by groups representing SMEs.  Although small businesses are largely exempt, there is also some disquiet about the proposals to allow supplementary business rates for specific projects.  In addition, the closing of the ‘loophole’ that allows income shifting between husband and wife is seen as a potential administrative headache, particularly where both partners are involved in running the business.

John Walker, policy chairman of the Federation of Small Businesses, said:

Overall … this PBR looks set to increase the financial burdens on small businesses at a time when they are contributing more than ever to the UK economy. The Government has again failed to recognise that contribution.

Director General of the British Chambers of Commerce was more forthright:

The changes to taper relief are a savage blow to entrepreneurs whilst the damaging rise in the small companies tax rise has not been reversed. Businesses will feel that the Government has done nothing to stimulate SME business growth.

budget | CGT | PBR | taper relief |