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Small firms deliver "damning" Budget verdict

Small business owners have given a "damning verdict" on last week's Budget.Half of those surveyed by the Forum of Private Business (FPB) said they thought the chancellor's plans would have a negative impact on their business.The trade organisation said its members were particularly concerned about how changes to the tax regime would affect their operations.In his Budget speech, Gordon Brown said that cutting the main rate of corporation tax from 30 to 28 per cent would "enhance the competitiveness of UK companies".Small firms questioned in the poll rejected the assertion that the measure would help them, however, because they would end up paying extra so larger businesses could benefit from the new rate.Of those questioned, 82 per cent said the subsequent proposed increase in the corporation tax rate for smaller firms would be damaging to their business, while only 5.5 per cent thought the cut in the main rate would benefit them.A further 51.6 per cent said the reduction in the main rate of corporation tax was not relevant to their business."We feel as though we are paying the price for big companies getting a tax break," said Lynn Willrich, owner of an audio visual and multimedia business in Brockenhurst, Hampshire.The results of the survey, published on the day the finance bill is published, also show that some 74 per cent of small business owners believe the planned increase in the VAT threshold is not appropriate to them.The benefit to small firms of tax allowances designed to encourage investment was also questioned by those surveyed, with 73 per cent saying the chancellor's boost to the research and development tax credit was not relevant to their business.A further 64 per cent said that tax credits to encourage environmental investment were also of no use to them.Meanwhile small business owners were equally worried about rising costs, with 83 per cent of respondents reporting that the two pence increase in fuel duty would damage their company.In a speech to the Federation of Small Businesses back in October, trade and industry secretary Alistair Darling said the government aimed to "make the UK the best place in the world to start and grow a business".

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