Plans to introduce supplementary business rates and changes to capital gains tax will hit many of the UK’s 4.5 million small businesses directly in the pocket. This comes as a big disappointment to small businesses still reeling from increases in corporation tax announced in the last Budget.

The FSB welcomed plans to simplify small business taxation and will be contributing to the Government’s efforts in this area. There were also welcome statements on encouraging skills and innovation and supporting intellectual property.

John Walker, FSB Policy Chairman, said:

“Alistair Darling’s first Pre-Budget Report was a disappointing one. The UK’s small business community, which contributes over half of the country’s GDP, will not be helped by increased business rates and a less generous capital gains scheme.

“There were some welcome announcements about simplifying the tax system, which is long overdue. The test now will be for it to actually happen in practice.

“Overall, though, this PBR looks set to increase the financial burdens on small businesses at a time when they are contributing more than ever to the UK economy. The Government has again failed to recognise that contribution.”