SMEs given boost but CGT goes ahead as planned

SMALL and medium-sized enterprises (SME) were given a fillip in today's Budget as Chancellor Alastair Darling announced a raft of measures to increase entrepreneurship.

Despite confirming that his controversial plans to raise capital gains tax (CGT) for business owners from 10% to 18% would go ahead next month accompanied by the limited concessions he was forced to announce for entrepreneurs in January, Mr Darling said the 13 million people working in the SME sector would benefit from his measures.

The Chancellor granted an extra £12.5m to promote more female entrepreneurs and increased the amount available under the Small Firms Loan Guarantee Scheme by £60m over the next year.

The scheme will be extended from next month to small and medium sized firms.

But David Heaton, partner and head of employer consulting at accountants Baker Tilly in Leeds, said the measures were a sign that the Chancellor had not done enough for SMEs in the past.

Mr Heaton described the cash for female entrepreneurs as “an insult”.

“The 12.5m put in will have very little impact,” said Mr Heaton. “It will cost more than £12.5m for the various funding bodies to put their bids together for the cash.”

SMEs would also be given the chance to win 30% of public sector work in the future.

Mr Darling said the measures “would give SMEs better access to cash flow and funds”.

On the issue of foreign nationals living in the UK – so-called 'non-doms' – Mr Darling confirmed the new £30,000 annual charge would be introduced from next month but said that further measures would not be introduced “in this parliament or the next”.

Mr Darling said the Government welcomed the contribution made by people from outside the UK but added that non-domiciled families should pay a “reasonable charge” after seven years.

An extra £60m is also to made available over the next three years to provide new opportunities for workers to gain new skills, including additional apprenticeships.

Mr Darling also said the level of tax relief under the Enterprise Investment Scheme would rise to £500,000.