Budget 2008 – make it a budget for business

Key groups representing business are calling on Chancellor Alistair Darling to make Wednesday’s 2008 Budget, a Budget for business.  This comes as a snap poll by the Federation of Small Businesses (FSB) reveals that 93% of UK SMEs have lost confidence in the government since the last Budget in 2007.

The Confederation of British Industry (CBI) is calling for a radical overhaul in the corporate tax system.  A CBI report released today, ‘UK business tax: a compelling case for change’, proposes a number of key reforms including: a headline corporation tax rate of 18% within eight years; a commitment to no legislative tax surprises; establishment of an independent tax commission, and; a simplified tax system to stimulate SME growth.

Richard Lambert, CBI director general said:

The UK tax system cannot continue as a ball and chain round the ankle of British business, when it should be a springboard for encouraging growth and attracting investment

The Trades Union Congress (TUC) reacted negatively to the CBI proposals, arguing that they represented a ‘tax dodgers’ charter’.  General Secretary Brendan Barber said:

The CBI is either astonishingly naïve or extremely disingenuous if it believes there could be such a thing as a non-political tax commission. Nothing is more political than tax policy.

Meanwhile the FSB is urging reconsideration of the planned changes to family-run business tax arrangements. 

John Wright, FSB national chairman, said:

Changes to income shifting rules will force family business owners to create and maintain an unrealistic amount of paperwork on individuals’ contributions to their business. It totally contradicts promises the Government has made about reducing red tape.

Small business groups have always lobbied hard ahead of Budgets, but you sense that recent flip flopping by the Chancellor is adding a certain piquancy to the process.