The budget plans last week certainly caused a stir in the media, but how are small businesses reacting to the news?
Many have been critical of the plans highlighted in the budget and it’s been labelled as far too optimistic. Real Business’ finance and banking section explored the implications the news has on individuals and businesses.
FC Exchange Managing Director Nick Fullerton writes:
"While some of these measures will benefit low-carbon companies and new technology start-ups, they will do little to restore business and consumer confidence and stimulate economic activity.
"Although the long-term unemployed will benefit from investment in job creation and training from 2010, nothing has been done to help businesses retain their existing skilled workforce, which continues to be decimated as a result of the recession.
"While welcoming changes to capital allowances and loss relief, the reality is that these will have only provide limited benefit to smaller businesses.”
Real Business also quote RKP Tax Partner Paul Webb. “It’s disappointing – there’s nothing tangible in there for small businesses but what did we expect?”
However, as part of these new plans came news that will benefit SMEs, as a scheme to help small businesses has been extended to November 2010. Times Online reported that the Loss Carry Back Scheme aims to give small businesses the opportunity to claim back tax paid on previous years’ profit:
“The Treasury said the carry-back scheme would help an expected 140,000 businesses, which will claim an average £4,000. The scheme allows companies to reclaim taxes on profits made in the past three years by “carrying back” losses of up to £50,000.
Small companies will apply through the Government’s Payment Support Service to receive rebates paid in profitable years.”
The feedback to this news has been very positive and will certainly help with smaller business cash flow. However, David Frost, director-general of the British Chambers of Commerce, commented that
"The Chancellor could have considered increasing the £50,000 carry-back limit to really make a difference.”
The truth is, only a magician could have created a budget which stimulated growth and made inroads to clawing back some of our national debt.
I hope Darling’s optimistic view becomes apparent, but I have a feeling we will be seeing tax increases very soon.
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