Budget offered some 'key' measures for small firms

A leading business group has identified a number of announcements in the Budget that will help smaller firms.

The Forum of Private Business (FPB), while expressing concern over the lack of a long-term strategy, believed that a number of Budget measures will come as a benefit to smaller firms.

The four-year extension to HMRC's Time to Pay scheme for businesses struggling to meet their tax bills, the implementation of a five-day target for invoice payments by public bodies and the creation of a credit adjudication service with powers to overturn loan refusals were particularly noteworthy for the FPB.

In a recent poll of the FPB's members, the Time to Pay scheme emerged as the most popular government measure.

The 'payment in 10 days' commitment by public bodies was the second most popular.

With firms still finding it difficult to gain access to business finance, the FPB has been calling for loan applications to be decided on a decentralised, case-by-case basis and said it hoped that the new adjudication service will help.

Phil Orford, the FPB's chief executive, commented: "We had asked the Chancellor to clarify and extend the Time to Pay scheme as it can be a lifeline for many small firms struggling with cash flow difficulties, so its extension for another four or five years will be welcomed. Additionally, the creation of a dedicated helpline for second-time applicants should help to clear up some of the confusion we've highlighted over whether or not Time to Pay is a 'once only' option."

Mr Orford also welcomed the target set central government departments of paying 80 per cent of supplier invoices within five days, along with the intention to increase the amount of government work being awarded to small firms by 15 per cent.

The FPB insisted on the importance of a dialogue between the banks and businesses in order to make sure firms have access to growth capital.

Mr Orford continued: "If it is set up and managed properly, the Credit Adjudication Service should also act as a valuable last resort for the many business owners who feel they have been unfairly denied loans and overdrafts."

Other aspects of the Budget which the FPB saw as positive included the new funds for lending to small businesses, the doubling of investment allowance to £100,000 and the increase in the lower threshold for capital gains tax and entrepreneurs' relief.

But the FPB was critical of the Chancellor's decision to press ahead with the planned rises in national insurance contributions and fuel duty.

Mr Orford said: "It was hugely disappointing to hear that the increase in NICs will still go ahead, considering the bureaucratic burden small businesses face in administering its threshold.

"Small businesses will also have been dismayed by the decision to plough ahead with increases in fuel duty and the Chancellor's failure to acknowledge both the regulatory burden smaller businesses face and the urgent need for a re-think of workplace legislation."