SMEs call for reductions to corporation tax in the Budget

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·         A third (33%) of SMEs view cuts to corporation tax as the most important possible change in the Budget

·         Almost a fifth (19%) call for greater employment allowances towards Class 1 national insurance contributions

·         But only 8% cited financial support for auto-enrolment as a top priority

A reduction in corporation tax would be the most popular move for SMEs in the Budget according to the latest Close Brothers Business Barometer research. Of the 554 SME owners polled, a third of British business owners listedfurther reductions to corporation tax as the top change they hope the Chancellor will introduce in the Budget. A further 18% would prefer increases in the basic rate income tax allowance. This comes amid speculation that the Chancellor could show more support towards small businesses in this week’s Budget.

Aside from cuts to taxation, when asked what change they’d like to see to help boost their business, one in five (19%) want to see greater employment allowances towards Class 1 National Insurance contributions, whilst one in nine (11%) demonstrated appetite for growth by calling for further government intervention to encourage banks to lend to SMEs.

Top five initiatives British SMEs would like to see in the Budget to help support their business:

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Initiative % that selected this as their top choice

1

Further reduction of corporation tax 33%

2

Greater employment allowances towards Class 1 national insurance contributions 19%

3

Further increase in the basic income tax allowance – 18% 18%

4

Further government intervention in encouraging banks to lend to SMEs 11%

5

Financial support of auto-enrolment 8%

 Patrick Haines, Regional Head of Advice at Close Brothers Asset Management, commented: ‘As the Chancellor takes to the stand to reveal his Budget for the next 12 months, attention will be focused on his plans to help boost British businesses further. SMEs want to grow and they clearly want tax relief to support this.

‘However, it is worrying how little emphasis is placed on auto-enrolment support. Regardless of any new initiatives, owners of SMEs can’t ignore personal planning.

‘Seeking support from experts such as financial advisers can help those looking for further guidance on tax planning and business development to ensure that irrespective of Government backing they have the opportunity to achieve growth.’