Budget Hits 'Private Business Confidence'

With the 'emergency' Budget less than two weeks away, rising cost fears over potentially damaging tax hikes are denting the confidence of small businesses.

That's according to the latest Economy Watch survey from the Forum of Private Business.

The Forum is warning that the struggling small business sector - widely regarded as the catalyst for economic recovery and growth - must not suffer unduly as a result of the difficult steps necessary to re-balance the economy.

In all, 37% of business owners surveyed in May 2010 said the cost of doing business - excluding tax - has increased. Almost a quarter (24%) said the tax burden has increased and 28% believe that existing levels of taxation are too high.

According to the monthly report, confidence has been dented by fears that tax increases in the Budget could hit small businesses hard.

The coalition Government is expected to reveal a raft of tax measures aimed at reducing the UK's huge deficit, alongside significant public spending cuts.
News Image
They include possible changes to capital gains tax and an increase in VAT, a rise in employers' national insurance contributions for some staff - although the 1% increase originally planned has been partially scrapped - and changes to corporation tax.

Despite a suggested cut in the higher rate of corporation tax there has been no indication of a reduction in the lower rate paid by small firms.

"All eyes are on the 22 June budget for the kind of policies needed to help small businesses grow," said the Forum's Head of Policy Matt Goodman, (pictured above).

"We know that public spending will be cut to help get the deficit down, but there will be knock on effects to public sector contract opportunities and business support measures, so it is important that the coalition government gets it right - particularly in the area of tax.

"Running a business and controlling costs can be difficult. The Government's emphasis must be on helping entrepreneurs to run their businesses more effectively, and fostering confidence as well as re-balancing the economy," he said.

Formed in 1977, the Forum of Private Business is a not-for-profit organisation that has developed a range of tailored business solutions to support, protect and reassure small firms throughout the lifecycle of their businesses.


Related UK National News Stories
Click here for the latest headlines.

17 January 2011
Simple Tax Laws 'Would Pay Off'
Some small business owners are so frustrated with the complexity of the UK tax system that they would pay more just to see it simplified, new research has found.
23 February 2011
Welcome For EU Review Of Support For Small Businesses
The UK Government, alongside other European member states including Belgium and Italy, today welcomed publication of the European Commission’s Small Business Act Review.
17 February 2011
Campaign Aims To 'Get Britain Trading'
A new campaign aimed at transforming the fortunes of smaller firms across the UK was launched today by a leading business group. Get Britain Trading, the brainchild of the Forum of Private Business, aims to raise awareness of the huge contribution small and medium-sized enterprises (SMEs) make to the UK economy.
30 November 2010
Corporation Tax Reform To Create 'Competition'
The Government has published details of its Corporate Tax Reform programme consisting of a series of essential reforms designed to improve the UK's tax competitiveness. Measures include the introduction of new Controlled Foreign Company (CFC) rules and a commitment to introduce a Patent Box.
20 October 2011
Bank Support For Small Firms 'Not Enough'
Research shows bank initiatives to boost small business lending have not gone far enough, says the Forum of Private Business Just over a year after the launch of the British Bankers' Association's Business Finance Taskforce, new research suggests that it has not yet achieved its aim of repairing the relationship between banks and small businesses.