Small firms in Islington will benefit from measures introduced by Alistair Darling in the budget yesterday, business leaders have said.
The chancellor outlined a £2.5bn package for small businesses to boost skills and innovation, invest in national infrastructure and key skills. The money for the fund will be paid for by the proceeds of the tax on bank bonuses and from switching spending from other areas.
Mr Darling said the tax bonus, which forced banks to pay a 50 per cent tax on banker bonuses over £25,000, earned the Treasury £2bn, more than twice the figure predicted.
A one year business rate cut from October and a new credit adjudicator to fast-track complaints from small firms who say they have been unfairly denied credit were amongst other announcements in the pre-election budget.
Business leaders in Islington have broadly welcomed the budget, though say that there “wasn’t much to shout about”.
Drazen Coric, director of Tax Assist Accounts and treasurer of Islington Chamber of Commerce, said: “The chancellor has addressed a few problems that small business had raised.
“I don’t think much was expected from the budget, and it is evident that there was a slight political agenda ahead of the election, even though the chancellor said there wouldn’t be.
“As far as small businesses are concerned there isn’t anything to shout about. Small business can be relatively happy with what is there, but the high earners won’t be. The majority of tax payers won’t be affected.”
In particular, the cut in business rates was welcomed by local firms, who will benefit from the reprieve. Nick Winch, spokesman for the FSB London Business Network said:
“Business rates are quite often the third highest expenditure for small businesses, so we welcome the business rates relief break for one year, it’s a measure which will certainly help a lot of businesses, particularly in London.”
However, the chancellor did not prolong or cancel plans to increase employer paid National Insurance contributions, which will go ahead as planned this April.
Mr Winch said: “We did some research with CEBR [Centre for Economic and Business Research] which suggested that the increase would cost 57 thousand jobs in losses or loss of creation of jobs.
“At a time when there’s concern about unemployment, it makes no sense to tax businesses who want to take on staff”
“We were hoping that if he had given help for business then that would have been it. That said, there are a lot of measures in this budget that we welcome.”
Cider drinkers in Islington will be particularly hard hit by the budget, which outlined a 10 per cent tax hike above the rate of inflation for the drink.
Alistair Darling said that there had been a “long standing anomaly which has meant cider has been under-taxed in comparison to other alcoholic drinks.”
The duty on wine, beer and spirits will rise by 2 per cent above inflation. Tobacco duty will also rise by one per cent.
Islington’s roads will also get a boost as the chancellor announced £100m nationally would be set aside for repairs to local roads.
The Budget also revealed that net borrowing for the financial year will total £167bn, down from the £178bn forecast in last year’s pre-Budget report.
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