FSB demands £1bn pre-Budget fund

The Federation of Small Business (FSB) says Alistair Darling must cut small business tax and create a £1bn SME fund in his pre-Budget report next week.

The facts:

The FSB wants the £1bn ‘small business survival fund’ to help small firms win short-term funding while the UK is in recession. It also wants the chancellor to scrap a previously announced increase in small business corporation tax, due to come into force in April.

The new fund would replace the Small Firms Loan Guarantee Scheme and would work as a temporary body distributing money to small businesses that need it most, said the FSB.

Small business corporation tax will rise from 21 per cent to 22 per cent next year, while at the same time big business taxes will drop. Business groups have accused the government of cashing in on small firms at a time when they need support.

They said:

“Small businesses are facing a crisis as finance dries up and the cost of finance rises,” said FSB national chairman John Wright.

“The government must do everything it can to ensure small firms do not need to turn to alternative and expensive sources of finance. A Small Business Survival Fund will provide the urgently needed solution.”

We say:

Reversing plans to increase small business corporation tax will feel like a tax cut, but will actually maintain the status quo. Small business demands should start on this, very reasonable, basis and go from there.

Cash-flow is small firms' priority right now, not red tape or any other gripes that are aired when the economy is strong. Alistair Darling must address this fundamental issue or risk the wrath of business voters.  

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By News Desk  on   Nov 17,2008

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Keywords

FSB    corporation tax    pre-Budget    Alistair Darling    economy    small business   

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