Giving with one hand, taking away with the other? The chancellor’s pre-budget report is perhaps no big surprise in delivering both pluses and minuses for the small business owner.
Along with The Federation of Small Businesses (FSB), I welcome 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 1st April next year, but will now be delayed until April 2011. I’m sure this deferral will help some small companies.
But, at the same time, the 0.5% increase in both employers' and employees' National Insurance contributions is bound to have a detrimental effect. I suppose the only saving grace is that this doesn’t come into play until 2011 and who knows what might happen between now and then?
I see in the news that there are equal numbers of small firms welcoming the changes as are reportedly ‘underwhelmed’ by the lack of support shown for SMEs. I’m certainly in the underwhelmed category – there doesn’t seem to be much that will help small firms or my clients on first glance. But I suppose it could have been worse, at least we haven’t had the extra increase in VAT that the media were speculating on over the weekend.
Gary Cousins Business lawyer This blog is not intended to constitute legal advice, nor is it intended to be a complete and authoritative statement of the law, and what we say might be out of date by the time you read it. You should always seek legal advice to confirm whether or how any information in this blog applies to your particular situation. We offer a free 30-minute telephone advice session to discuss your particular circumstances.