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Last Updated:  Wednesday, 9 April, 2003, 15:41 GMT 16:41 UK
Few benefits for small businesses
By Neil Hamper
Federation of Small Businesses

Neil Hamper

For small businesses, the 2003 budget offers little change at a time when small businesses genuinely needed a helping hand from the Chancellor.

In practical terms this does of course mean that many small businesses may mistakenly think that the freezes announced today will have no impact.

However the freeze, freeze, freeze regime does in fact generate additional tax revenue for the treasury as inflation does the Chancellor's job for him.

Small businesses considering IT investment can take advantage of the one year extension to the 100% tax break for this sort of expenditure.

Those looking at investment in R&D may be interested in the Chancellor¿s promised review of this potentially useful tax break ¿ it will be autumn before the outcome is clear.

Cause for concern

The standard VAT threshold rise of £1,000 to £56,000 was expected and the flat rate scheme has been extended ¿ but this scheme is of limited benefit.

The lifting of the audit threshold from £1m - after protracted consultation- is still keenly awaited.

The reform of stamp duty and promised reduction in rate, under the banner of tax avoidance, means that small businesses contemplating commercial transactions need to be very wary that they can accommodate the additional costs generated by the proposed new way of calculating the duty incurred.

The extension of the Small Firms Loan Guarantee Scheme is expected to benefit a further 400,000 small businesses so everyone needs to look at the opportunities this may offer for developing their business.

The new British Small Business Investment Companies are intended to provide extra venture capital for the difficult to reach small business sector and may be one to watch.

For those business owners of a nervous disposition the increase of 8p on a packet of cigarettes will hardly be soothing but the freeze on spirit duty will provide much needed comfort.

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