BUDGET 2009 not much delivered for small business!

[Michael Smith]

Darling's second Budget doesn't deliver much for small business

From the midst of the UK's economic wreckage the Chancellor emerged with his Budget yesterday for "homeowners, businesses and the unemployed".

He started brightly enough - intending to "build on the strengths of the British economy" and "speed the recovery" with a raft of measures.

However, there were relatively few new or meaningful measures that will help the smaller firm or the self-employed. Here's a run-down of what was announced:

Help for existing businesses

Loss-making companies can reclaim taxes on profits made in the last three years until November 2010.

A top-up trade credit insurance scheme will be introduced, which will match private sector trade credit insurance provision if insurers reduce their cover for businesses operating in the UK.

Main Capital Allowance for businesses has been doubled to 40%.

Which sectors benefit?

A new £750 million Strategic Investment Fund will help emerging technologies and sectors. Here the communications and digital sectors benefit, as an extra 10 billion of funding for them has been announced.

The construction sector has received a much-needed boost. Funding of £500 million for the construction sector in order to kick-start house building projects. This includes 100 million for local authorities to build energy efficient homes. And 50 million has been allocated to upgrade housing for the armed forces.

There's good news for the automotive industry too - sort of. In a bid to stimulate the new car market, a scrappage scheme was announced, giving motorists a £2,000 discount on a new car when they trade in a vehicle which is more than ten years old. This will run from May 2009 until March 2010. But experts say it will do nothing to help the second-hand car market.

Tax and VAT changes

The lower rate of 15% VAT has been confirmed to continue until December 2009. Many businesses have deemed the lower rate a waste of time as consumers really only see the benefits if they make big purchases.

Darling turned to the highest earners to help the UK's debt burden. Income tax for people earning more than 150,000 will rise to 50% from April 2010. And tax relief on pensions will be reduced for people earning £150,000, from 2011.

The VAT registration threshold is to be raised from £67,000 to £68,000, effective from 1 May this year. Business and industry representatives called for it to be raised to an amount in excess of £90,000, so no wonder this token gesture didn't get a mention in his speech.

Training and jobs

Everyone aged under 25 who has been out of work for a year or more is to be offered a job or training - but they have to wait until January 2010 for this to come into effect.

Funding of £250 million to help people get work experience in growth industries such as the communications and digital sectors.

your thoughts would be appreciated.
regards
michael