Minimal budget benefits for small businesses says bssa

"With the proposals for new 'income-shifting' regulations being roundly condemned as unworkable, and following the findings of the recent Arctic Systems case, we are pleased that the Chancellor has decided to delay the implementation of what many consider to be an unfair 'family business tax'. Better still, however, would be the government's decision to drop this controversial measure completely."

Confirmation of the decision to peg Capital Gains Tax for small businesses at 10% for the first £1 million of capital gain, albeit for cumulative lifetime relief, has also been welcomed by bssa, although there was disappointment that there was no move to reduce or delay the planned increases in small business corporation tax. "With overheads rising well above inflation, such a move would have been very welcome," adds John Dean.

Assessing the likely impact of other elements of the Budget, bssa predicts that increased taxation on alcohol and fuel will inevitably further reduce consumer discretionary spend in other areas. This in turn could significantly impact on retail, where like-for-like growth has already slowed markedly.

The government's decision to introduce a charge for plastic bags in 2009 is also seen as controversial, particularly when responsible retailers are working hard in this direction already. Whilst it is recognised that both the consumer and retailer need to be more responsible in terms of 'green issues', the implications of a 'bag tax' in terms of the use of alternatives such as bin liners and the overall cost and potential environmental impact of alternatives need to be thought through carefully.

"Overall," concludes John Dean, "we are pleased that the Budget has sprung no surprises and that there is some good news for small businesses. However, we do not feel there is sufficient here to give small businesses the fillip they need in this challenging trading environment."