Tax

The Chancellor dubbed his Budget one of ‘prosperity and fairness for families'. The FPB believes that it contained little to achieve the same for smaller businesses; tax cuts aimed at big business will do nothing to ease the burden for the majority of the private sector. The Chancellor reduced Corporation Tax from 30% to 28% but announced that the Corporation Tax for smaller companies will be raised to 22p by 2009.

Mr Goulding said measures will deliver for larger firms not for smaller businesses.

"The reduction in the main rate of Corporation Tax will benefit larger firms, not the smaller businesses that make up the majority of the private sector. The changes made for smaller firms will serve only to further burden them."

Pauline Birdsall is Director of Key Air and Sea, a freight forwarding company in Hayes, Middlesex: "What do we have to do to makes ends meet? The Government is clearly afraid of big businesses going abroad, but they don't seem to worry much about the small firms. As a group we are major employers and we are totally undervalued."

The FPB's VAT adviser, Andrew Needham, says the speech promised further red tape: "The Chancellor has done a few things for people but little for business. Increasing the VAT registration level to £64,000 was a positive but there will be an increase in bureaucracy overall and there are additional taxes such as increases in tax on CO2 emissions and increases in landfill tax."

Skills

The Chancellor announced a scheme with Tesco, Sainsbury's, Asda, B&Q, Marks and Spencer and the British Retail Consortium to help people complete training and find work. The FPB's Campaigns Manager, Victoria Carson, said that will add to the unfair competition within the retail sector: "Why does the Chancellor find it necessary to support dominant retail chains – they already enjoy the perks of their size and wealth? More attention should have been given to relevant business education in schools."

Property

The Chancellor has announced a reform of the relief on empty business premises. The changes will result in the businesses receiving relief on empty property for just three months with six months for industrial and warehouse properties. It is possible that this new proposal could leave some companies out of pocket.

Missed opportunities

Gordon Brown has missed the opportunity to improve the environment for small businesses by failing to take action in the following areas:

• Amend the Low Value Consignment Relief (LVCR) offshore VAT loophole
• Re-introduce the nil rate starting band on Corporation Tax for the first £10,000 of profits
• Introduce a more efficient VAT registration process
• Integrate National Insurance with income tax for schedule E taxpayers
• Link the National Minimum Wage to the Retail Price Index
• Combine VAT and Company Tax inspections to follow those recommendations already presented in the O'Donnell Review
• Reintroduce tax exemption on computers for employees
• Give businesses more influence within skills initiatives
• Focus further education on the needs of businesses
• Priorities must be set for the Small Business Service
• Set aside a percentage of public procurement contracts for smaller businesses
• Control of the simplification agenda