The Federation of Master Builders (FMB) has hit out at the increase in corporation tax on small companies in last week’s Budget, saying it will hinder small and medium enterprises (SME) and benefit bigger players.
Chancellor Gordon Brown announced that the corporation tax rate for small businesses would increase from 19% to 22% by 2009, while the rate for large companies would drop from 30% to 28%.
Richard Diment, director-general of the FMB, said that SMEs had been unfairly singled out.
He said: “SMEs have enough to worry about with the seemingly endless red tape and its disproportionate effect on small firms, without having to stump up extra cash to subsidise a tax cut for the big boys as well. The Chancellor needs to realise that SMEs are the life-blood of any industry and that they should be helped, not hindered, by taxation policies.”
SMEs are also likely to be particularly hit by increases in fuel duty. They will benefit from a an annual investment allowance of £50,000 covering plant and machinery, which will provide immediate tax relief for capital expenditure.
• One in four UK workers are not saving for retirement, according to research by construction stakeholder pensions provider B&CE Benefit Schemes.