Page last updated at 15:20 GMT, Wednesday, 9 December 2009

Small firms welcome tax deferral

Louisa Sheppy
Louisa Sheppy welcomed the decision to defer the corporation tax rise

The Federation of Small Businesses (FSB) has welcomed the chancellor's decision to defer the one pence rise in corporation tax for small firms.

This increase had been due to come into effect from 1 April next year, but will now be delayed until April 2011.

The FSB said it would give small companies a "helping hand".

However, the FSB said it was disappointed with the 0.5% increase in both employers' and employees' National Insurance contributions.

"Raising National Insurance by a half of 1% in 2011 is an attack on jobs and shows a real lack of vision from the government on tackling the key challenge of rising unemployment," it said.

Funding boost

Louisa Sheppy, co-owner of Somerset-based Sheppy's Cider, said the corporation tax deferral would come as a "welcome relief" for any small companies that were struggling.

The chancellor presented a welcome pre-Christmas message for small businesses today
Tom McGinness, KPMG

However, Mark Stimson of BPL Solicitors in Dorset said he was "underwhelmed" by the pre-Budget report.

"There doesn't appear to be much that will help small firms," he said.

The FSB added that it was pleased to see the government extend the £1.3bn Enterprise Finance Guarantee fund for small firms looking for new finance.

This move was also welcomed by accountancy group KPMG, which said that overall, it had been an "encouraging" pre-Budget report for small firms.

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1p increase in corporation tax for small firms to be deferred

"The chancellor presented a welcome pre-Christmas message for small businesses today," said Tom McGinness, head of middle market tax at KPMG.

"Although there were no new measures, there were further deferrals or continuation of already in place schemes."

Mr McGinness also welcomed the chancellor's announcement that struggling small firms will continue to be able to apply to delay their tax payments, as the Business Payment Support Service scheme is extended.

So far this has allowed more than 160,000 businesses to delay tax payments of over £4bn.

Ms Sheppy added that she was disappointed that Alistair Darling gave no direction on future alcohol duty moves.

"This makes it impossible for us to plan," she said.

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