Small business confidence in Government plummets

Ahead of Budget 2008, a new snap poll taken by the Federation of Small Businesses shows that confidence in the Government has plummeted since the same time last year.

According to the FSB, a massive 93% of small business owners said that their confidence in the Government had decreased since last year’s Budget, while just 7% said that it had increased or remained the same.

Most experts are predicting a gloomy Budget for small businesses. Even though the headline rate of corporation tax is set to fall to 28%, the Small Companies' Tax Rate is due to rise to 21% from April 2008 and then to 22% from April 2009.

Other measures that are bad for small businesses include a predicted 2p rise in fuel duty, the abolition of CGT taper relief (and replacement with the underwhelming "entrepreneurs' relief" concession), and the controversial "income shifting" family business tax.

Commenting on the poll results, 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.

“The fiasco over capital gains tax rules and the increases in corporation tax for small companies have also undermined the Government’s credibility. The Chancellor should use this Budget to mend some bridges.”

Check our dedicated Budget 2008 section for full coverage.