Today, Alistair Darling revealed the budget for the coming year. A lot of policies were focused was on helping small businesses with a “£2.5 billion one-off growth package”. Really, though, this is going to do little to really help small businesses.
The chancellor included tax breaks, better access to credit, better payment terms from the public sector and lower business rates for small businesses. In summary:
– SME’s can double claims for investment allowances during their first year of business, allowing claims of up £100,000 from taxable profits to be invested in to the business.
– A cut in business rates for one year for SME’s – with up to 345,000 small businesses paying no rates at all.
– The threshold for capital gains tax to be charged at 10% will be increased from £1million to £2 million.
– State-controlled banks would offer up to £47 billion in loans to SME’s in the next year.
However, these headline grabbing, unsubstantial and inflated promises hide many policies that will place a huge strain on SME’s. The increase in National Insurance contributions will hit small businesses hard, as will the increase in fuel duty.
Whilst there are numerous policies in place for SME’s in this budget, I consider that many of the policies are headline grabbing and clear electioneering in the face of the forthcoming General Election. In truth, there is little new money in this budget for SME’s, and little of real substance to help those that are struggling. In my view this was a token effort from Mr. Darling to rescue his government from the brink.
What small business needs, Mr. Darling, is help. Not policy.