Budget day: what will be in it for small business?

Amid the tug-of-war of the coalition parties, at the centre of the budget debate has been the "will he, won't he" speculation around the 50p tax rate, with rumours that the chancellor would seek a cut in the top rate as a way of saying Britain is open for business. Whether he will abolish the rate altogether or simply cut it remains to be seen.

But beyond this measure so far there has been little to suggest how the budget will affect the smaller businesses. In many ways Osborne's options are limited - he will need to stick to his deficit reduction plan so it is safe to say there won't be too many give-aways.

Already it has been announced that the national guarantee loans scheme will afford small businesses a one per cent point discount when borrowing from one of four banks that have signed  up to the scheme. But many will be looking for an increased awareness of alternative finance options.

But with the latest unemployment figures showing record levels of youth unemployment at 22.5%, Osborne will be keen to get more firms to hire extra people, so he is likely to include some incentives for smaller companies to start hiring, which will hopefully cut benefits payouts in the long run. This could be in the shape of tax relief to encourage new ventures and new employment.

Small businesses we have spoken to at Smarta will be expecting decisive action to support them if they are to play the pivotal role in the recovery of the economy as is expected of them. There have been calls for a simplification of the taxation system, a cut in National Insurance rates to encourage small firms to take on new staff and a further reduction in corporation tax, which wouldn't cost the chancellor anything right now.

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