While there were several major announcements which will benefit UK industry as a whole, we believe the chancellor failed to go far enough to help the majority of small businesses, particularly micro-businesses.

Notable tax announcements included continuing to clamp down on tax avoidance, cutting the main corporation tax rate to 22% by 2014, and a commitment to reform the tax system to make it simpler for small firms. This included looking at merging income tax and National Insurance and changing tax rules to calculate tax for firms with a turnover of £77,000 on a cash basis.

This latter point is about as good as it got for the smaller businesses, but only those firms with a turnover of less than £77,000 will benefit from this new policy – so this is a scheme aimed squarely at the micro-sector and while it will be welcomed by those traders, those on the wrong side of the ‘cliff-edge’ threshold will miss out.

Abolishing the 50p tax rate was something we had been advocating prior to Budget day, but only in conjunction with increases to the PAYE tax thresholds. The chancellor delivered both of these, which we think is a positive move for both small businesses and the wider UK economy.

Reducing the higher rate is a green light for investment, and will encourage entrepreneurship and business in the UK. The impact of 50p rate was to mark the UK out as a high-tax nation – one of the highest taxing countries in the EU in fact. By reducing it the chancellor has made the UK are far more attractive place to come and do business, and sees the UK drop down the global tax league table to a level on a par with Germany. 

That said, not many small firms will be affected by this – few SMEs will pay directors let alone their staff in the higher band.

At the other end of the spectrum, though, the PAYE thresholds have been raised, and that is something also that has to be welcomed and will obviously benefit many more. And the more money consumers have in their pocket the more they can spend – an important feelgood element.

With regards fuel duty, the Chancellor’s refusal to bring any relief here will mean many businesses looking ahead to August with fear and trepidation when the 3p increase bites. This could be ruinous for many small firms. The hope has to be that the current record-breaking prices will have tumbled by then, instead of continuing to skyrocket as they have done since December.

That business rates remain unchanged is disappointing. In our pre-Budget submission we made a strong case for the rate to be slashed down to 2% to help struggling high-street traders.

Osborne touched on the National Loan Guarantee Scheme (NLGS) in his budget speech. However, we feel the £20bn ‘credit easing’ initiative is more relevant to large companies seeking big loans. The government says it will be helpful to smaller firms and if it means SMEs don’t have to use high-APR sources of finance, such as credit cards and overdrafts, so much the better.

– Forum of Private Business policy adviser Robert Downes

You can read PrintWeek's Briefing on the Budget here