HAS Alistair Darling’s multi-billion pound rescue package, unveiled last week in his pre-budget report, gone far enough to help Tees Valley’s small businesses?
A temporary £1bn finance scheme to provide flexible lending facilities for small firms and immediate tax holidays on VAT, corporation tax, income tax and National Insurance has all drawn backing from business groups.
In addition, SMEs have been given more flexibility over tax payments, with firms able to offset losses of up to £50,000 against profits recorded for the last three years - a move the Chancellor claimed would help 75% of SMEs and wipe out losses for 90%.
But some, including the Forum of Private Business claim more radical action - such as a cut in small business corporation tax - is necessary to protect SMEs against the expected recession next year. In addition, small employers will lose out under plans to increase National Insurance contributions by 0.5% from 2011, while the empty property tax relief exemption extends only to vacant properties with rateable values of under £15,000 for 2009/10.
So were the measures, which added more than £100bn to public debt, a lifeline for small firms or a missed opportunity?
THE REACTION:
Steve Guest, managing director of Wilton-based recruitment firm TechConsult UK, said although the 2.5% cut in VAT would “help in a small way”, the Government “could have done more” to help SMEs.
He said: “The measures won’t pull failing firms from the brink of the fire. They won’t really help or hinder our progress.”
Steve James of Steven James Guitars in Middlesbrough, welcomed the cut in VAT but said the Chancellor’s announcements were “more for the spender than the retailer”.
He slammed “extortionate” business rates and said the Government should do more to reduce his £650 per month bill to Middlesbrough Council.
Middlesbrough chef Geoff Johns, renowned for his chicken and pork ‘parmo’ meals, is worried that small firms will end up paying for the UK’s fast-growing debt mountain.
He says: “To go that much into debt, they have to claw it back somehow. Our children and grandchildren could end up footing the bill.”
Stephen Easton, of Gas & Oil Ltd in Guisborough, described the VAT cut as “a step in the right direction” but said start-up firms should be given “more incentives and less paperwork”.
