smallbusiness.co.uk: Helping your business think big

There were no big giveaways for business in Alistair Darling's last budget before the General Election, but there are a few bright spots. We summarise the main points.

No major tax rises except those already announced: Increases to income tax (the new 50p rate) and national insurance contributions will go ahead, but no further rises are planned. VAT is to remain at 17.5 per cent.



Entrepreneurs' relief doubled: Those who sell their business are currently taxed at 10 per cent (as opposed to 18 per cent) on the first £1 million of their proceeds. This is to be doubled to £2 million.

Business rates to be cut from October: No figures yet, but Darling says this will help 'nearly half a million small businesses', some of which will pay no business rates at all.

Investment allowances doubled to £100,000: Businesses will be able to claim back capital expenditure of up to £100,000, double the current threshold.

More pressure on banks to lend: RBS and Lloyds are to provide £94 billion of new business loans next year. Nearly half of this is to go to small and medium-sized enterprises (SMEs). A new Credit Adjudication Service will be set up to deal with complaints from SMEs which have been refused bank loans, with legal powers to 'enforce judgements' if credit has been 'wrongly denied'.

A new body to oversee government finance: Acknowledging that businesses find the wide variety of government initiatives confusing, Darling announced the launch of a new body, UK Finance for Growth, to oversee all state finance support for businesses.

More government contracts for SMEs: A target of 15 per cent is to be set for government contracts to go to SMEs, and government departments will aim to pay 80 per cent of invoices within five days.

Time to pay scheme to be extended: Darling says this scheme has helped businesses spread £5 billion of tax payments over a more comfortable timetable. The scheme is to be extended for the whole of the next parliament.

A new "green bank": An investment bank will be set up with £2 billion to invest in the move to a lower-carbon economy. Its initial focus will be on green transport and sustainable energy, in particular offshore wind. There will also be £60 million to develop ports to host manufacturers of offshore wind turbines.

More money for university spin-outs: A new University Enterprise Capital Fund of £35 million is to be set up to help transfer bright ideas into businesses.

Economic forecast revised downwards: While sticking to his guns on his forecast for growth of 1 to 1.5 per cent this year, Darling is predicting growth of 3 to 3.5 per cent for 2011, lower than originally forecast.

Government borrowing lower than expected: Borrowing for this year should be £11 billion lower than previously forecast, at £167 billion. By 2014, overall government debt will be £100 billion lower than advertised in the last Budget.

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