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Budget 'bad for SME business'

Published On 22 March 2007 at 12:03:07

Just 24 hours after Gordon Brown announced his 11th Budget several organisations have revealed that the new policies may in fact harm many small and medium-sized enterprises (SMEs).

A spokesman for accountancy firm KPMG has slammed the new proposals, saying that SMEs would have to pay for the chancellor's new policies.

"The reduction in corporate tax rate is essentially being funded by the reduction in capital allowances," David Woodward, head of capital allowances at KPMG, explained.

"Many businesses, especially those in the more capital intensive sectors such as hotel, leisure, retail and others with large property portfolios, are potentially going to be worse off."

Mr Woodward added that the chancellor had done little to simplify the regulation burden placed on SMEs, adding that "many of the areas of complexity still remain."

Similarly, the Federation of Small Businesses (FSB) attacked the new policies, saying that they unfairly targeted SMEs while helping larger companies.

"Corporation tax was cut for large firms but increased for smaller ones," FSB national chairman Carol Undy said.

"Small businesses employ fifty eight per cent of the private sector workforce - over twelve million people - and the increase in their tax rate fails to acknowledge their contribution."

 

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