Budget 2008 - FSB asks Chancellor to give small companies a break

Following the Government's widely condemned proposed changes to the Capital Gains Tax regime, and more recently - the so-called income shifting "family business tax", the Federation of Small Businesses (FSB) has called on the Chancellor to give small businesses a break when he delivers his Budget on 12th March.

At a time when business confidence has dropped following the credit crunch, the FSB has asked the Chancellor to implement a series of measures, including:

- A review of the current systematic dismantlement of the Post Office network.

- Small Business Rate Relief should be applied automatically, without a lengthy application process.

- Simplification and Stability of the taxation system for small companies

- A review of IR35, which is causing a serious administrative burden to small companies and HMRC alike, and it brings in little revenue.

- The FSB is totally opposed to the proposed legislation on income shifting which will penalise family members who are legitimately in business together.

You can read the entire Budget Submission here.

John Wright, FSB National Chairman, said:

“The past twelve months have seen small businesses receive a series of harsh body-blows from which they are still trying to recover. There was the increase in small business corporation tax in last April’s budget, then there was the CGT fiasco – it cannot be stressed strongly enough just how important small businesses are to the UK economy. It is vital they are given more help to innovate and prosper. More hindrance will only see them, and the UK, shoved further backwards.

“The year has already begun with the threat of a recession which is difficult enough for small businesses to deal with, without having to contend with more obstacles put in the way by the Government. This wilting relationship between small businesses and the Government needs to be reinvigorated and March 12 will announce whether spring is in the air or whether frosty relations continue.”

Given that there are 4.3 million small businesses in the UK, employing over 13 million people and contributing 50% of the UK's turnover - it would be nice to think that the Chancellor would take on board the FSB's suggestions. On past performance, however, this would seem unlikely.