Alistair Darling announced improvements to the Small Firms Loan Guarantee Scheme and increased the limits for EIS investment and share option schemes.
"These only help a small proportion of firms, whereas all small businesses will be hit by the increase in corporation tax for small businesses from 19% to 20% that comes into effect this year, with further increases to come, " says Brian in respect of the changes which were announced previously. Brian also adds that the changes in Capital Gains Tax (CGT) to a single rate of 18% is a good move as it reduces significant complexity. However, the change will be a negative one for small firms which previously enjoyed lower rates.
"More could and should have been done to help small companies through what will be a difficult economic period" says Brian. "Although the basic principle of creating a global rate through the CGT is fundamentally correct, the workings and overall effects over the long term have not been fully thought through. This, combined with previous taxes introduced, will negatively affect smaller companies and their bank balances."
Another area of the Budget that has not been thought through by the Government says Brian, is the introduction of a review on the long-term fixed rate mortgage.
"This was something Gordon Brown announced in 2004, and was not successful. The truth is that the marketplace does not suit this type of mortgage rate as consumers will always go for short term products which seem more attractive. The further review will achieve little. "
"Overall, the Government has its hands tied " says Brian. "This Budget has concentrated on low value measures as the stealth tax rises over the years have eliminated the Government's room for manoeuvre. "
