"The FPB is urging the Chancellor to radically rethink many of his ideas, in particular his tax plans, which specifically disadvantage smaller businesses," said the FPB's Policy Representative, Matt Goodman. "Issues such as excessive legislation, unfair competition and the dearth in work-ready, skilled employees leaving education must also be addressed as a matter of priority."

The Chancellor of the Exchequer, the Rt Hon Alistair Darling MP, will announce the Budget on 12 March. Research carried out by the FPB showed that 97% of respondents believe that recent tax changes have made the UK a worse place to do business.

In his Pre-Budget Report, and the Comprehensive Spending Review of 9 October 2007, the Chancellor revealed that small firms' corporation tax contributions will increase from 19% to 22% from April 2008. However, the higher rate of tax to be paid by large firms will be reduced from 30% to 28%.

In addition, Capital Gains Tax (CGT) taper relief will be brought to an end. Following sustained pressure from the FPB and other groups, the Government partially restored the 10% rate, but, after the first £1 million in asset sales, the higher 18% rate will still be imposed. Mr Darling also plans to remove indexation, by which CGT calculations were adjusted favourably to take account of inflation.

Clamping down on ‘income shifting', where business owners transfer income as dividends or partnership profits to an employee who pays a lower rate of tax, will needlessly require businesses to quantify the contribution of partners and family members, placing a huge administrative burden on small businesses.

This long-established tax incentive has benefitted many family firms, in particular. Although the House of Lords ruled in favour of the husband and wife owners of Arctic Systems in a 2007 test case, the Government has decided to change the law to make the activity illegal.

The FPB is also calling for employers' National Insurance Contributions (NICs) to be reduced. The current NI exemption for holiday pay will be withdrawn from 30 October 2008.

Failure to tackle the multinational supermarkets' domination of towns and cities across the UK, the proposed increase in fuel prices, introduction of national road pricing schemes and the imposition of supplementary business rates will further undermine many of the UK's smaller businesses.

FPB member Tim Rhodes, Managing Director of Skypark Freight in Liverpool, called the Government's tax regime ‘abysmal'.