Budget 2008: Darling promises help for small businesses
Alistair Darling announced measures to help small to medium businesses in his budget.
The chancellor said a £12,500 would be available to help women entrepreneurs, while tax calculations would be simplified for small businesses.
The government is committed to reducing trade barriers to assist export business, while a new capital gains tax will benefit over 80,000 firms.
The chancellor said funds available through the Small Firms Loan Guarantee scheme will be increased by £60 million for the coming year, to help small businesses through the current credit crunch.
Mr Darling also said the scheme would be extended to small and medium firms next month.
In addition, the amount of investment on which tax relief is available under the Enterprise Investment Scheme will rise from £400,000 to £500,000, and the employee share limit for tax relief under the Enterprise Management Incentive Scheme will increase from £100,000 to £120,000.
Commenting on the reforms, Kate Syred, head of Direct Line for Business said: “While it is disappointing to see the abolition of an effective taper relief system for a controversial single flat rate, the government’s response to the concerns of the small business community with the introduction of the ‘entrepreneur relief’ is a step in the right direction.
“The reforms, however, have caused a lot of confusion and uncertainty within the small business community, and businesses with gains over £1 million wanting to sell up and lock in ten per cent before April have been given a very short timeframe to do so.
“Changing regulation and legislation worries over a quarter (28 per cent) of small business owners, so it is important such changes are communicated effectively.”
Richard Lambert, director-general of the CBI, said: “Although the anger over capital gains tax is still simmering, entrepreneurs and smaller businesses will recognise that the Government has made an attempt to listen.”
Mr Darling also confirmed reforms to the North Sea fiscal regime to help incentivise investment and support production.
Oil and gas extraction declined in January and production is now down by 41.5 per cent from its peak in 2000, making fuel more expensive and adding to inflation.
