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March 16, 2016

Budget reaction: Good for SMEs but more could be done

Business groups representing the UK's small business community have welcomed many of George Osborne's Budget announcements, but some would like to see him go further on tax simplification.

Business groups have reacted positively to the 2016 Budget Statement. Mike Cherry, policy director at the Federation of Small Businesses (FSB), said: "FSB members have campaigned hard to make small business rate relief permanent, and expand it - and the Chancellor has heeded our calls, taking many small firms out of the system altogether. The combined measures announced on business rates - the single biggest tax cut in today's Budget - will be viewed by our members as a welcome and important step on the road to fundamental reform."

Dr Adam Marshall, acting director general of the British Chambers of Commerce (BCC), agreed: "Business wanted a steady, workmanlike Budget, and that's what we got. The Chancellor listened to our calls to avoid higher business taxes and costs - and indeed moved to lower them in a number of areas. He has finally taken real action to lessen the crushing burden of business rates, and sharpened incentives for entrepreneurship and investment."

However, some commentators said that Osborne had missed an opportunity to radically reform the business tax regime. Jason Kitcat, micro-business ambassador at Crunch Accounting, said: "Ultimately the big prizes of a simpler, fairer system of tax and benefits remains to be grasped. A major review of the entire system, building on the excellent work of the Office of Tax Simplification (OTS), is well overdue."

Meanwhile, the Institute of Directors (IoD) questioned whether Osborne had got his numbers right. Simon Walker, IoD director general, said: "Much heavy lifting will still be required to get rid of the deficit by the end of the Parliament. For a Chancellor who correctly prizes maths education, although he's come up with a good answer, he hasn't yet shown us enough of his working on how he plans to get there."

Overall, small business groups welcomed the attention for SMEs in Osborne's eighth Budget Statement. Darren Fell (pictured), CEO of Crunch Accounting, said: "It's nice to see George Osborne slowly getting his head around how modern entrepreneurialism works, and beginning to support businesses at all stages of growth."

He added: "There's still a huge gulf between the amount of support afforded to larger corporates and that offered to the self-employed and micro-businesses, but the very fact that they weren't entirely ignored - as in previous Budgets - is gratifying."

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