Budget summary
Mar 21 2007
Chancellor Gordon Brown has made his Budget speech to the House of Commons. During recent Budgets the Chancellor has announced initiatives to reduce the complexity of taxation regulations but progress has been limited.
To keep you up to date with Brown’s 11th and probably final budget, SmallBusiness.co.uk spoke to chartered certified accountant Robert James Partnership about the implications for small business owners and managers.
Paul Webb, tax partner at Robert James Partnership comments: 'Since 2003 we have seen a big increase in the numbers of businesses seeking advice on what was previously quite a straightforward process, which suggests tax has become too complex for them to deal with alone.'
He adds that ‘although there were some simplifications on the tax side of things in this Budget, they didn’t go as far as we were hoping. While the big headline-grabbing announcement is the reduction in the corporation tax rate from 30 to 28 per cent from April 2008, the small companies tax rate is set to rise from 20 to 22 per cent.'
'With the majority of companies paying tax at the small companies rate, it seems that small business will be paying for the retention of large business in the UK and for many other tax cuts for families and the individual.’
Carol Undy, FSB National Chairman, reiterates the criticism of Brown, saying: 'This year’s offering is no different – he gives with one hand and takes with the other. However, this year, after some welcome initiatives he throws it all away with a tax hike aimed at small businesses.
'Corporation tax was cut for large firms but increased for smaller ones. 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. A cut in income tax is welcome but does not fully offset the dismay felt by small firms despite the other allowances that he has offered.'
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