Reading reacts to Osborne's Budget

Published: 22 Mar 2012 13:252 comments

A READING tax expert has said small businesses will see very little change following yesterday's Budget.

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Richard Berry, who runs TaxAssist Accountants, highlighted that chancellor George Osborne's 24% cut in corporation tax only applies to firms with profits over £300,000 but said the majority of small companies get "nowhere near" that figures.

He added: "We knew there was very little scope for the Chancellor, but this was not a Budget for sole traders and small firms across Reading who are the backbone of our local community."

But Mr Berry said the fact that the Coalition Government has already introduced the National Loan Guarantee Scheme, which offers low interest loans to small businesses, should not be overlooked.

He continued: "And those looking for finance to start their business were offered the lifeline of the Seed Enterprise Investment Scheme which launches next month.

"Extra funding to help construction firms build new homes will have knock-on benefits for many small businesses, such as builders, joiners, plumbers and electricians, who have been severely hit by the recession, but it was disappointing that there were no concessions on fuel duty.

"For trades people and service providers who make home visits, their cars and vans are a vital part of their service, not a luxury and they can't absorb the cost of fuel price increases."

David Brookes, from Reading-based BDO, welcomed the reduction to a top income tax rate to 45p from 50p and the raising of the personal tax allowance threshold to £9,205 in 2013.

He added: "This top income tax rate and the headline tax rate are certainly influential considerations for global businesses looking to make foreign direct investment and the 50p was certainly an own goal in economic terms."

But Reading's leading Labour party slammed the reduction and council leader Jo Lovelock said: "With cuts in Tax Credits making life harder for those on low pay and in part-time work, the whole Budget debate within the Tory-Lib Dem Coalition has focused on the taxes to be paid by the richest 1% of the population, those earning over £150,000 a year.

"Even the LibDems' key demand of raising the tax threshold actually is worth a lot more to high earners than to low earners. This is the budget that shows the Tories and their LibDem allies have finally thrown fairness out of the window."

Tobacco tax will also rise by 5% above inflation, adding 37p on 20 cigarettes. Smoker Ashley Haines, 22, from Woodley, said: "It's ridiculous. We are already being taxed to the hilt, why should we be punished?"

But Reading East MP Rob Wilson labelled the Budget "one for working people, dealing with the economic crisis of today, building prosperity for tomorrow".

He added: "Chancellor George Osborne was absolutely right to say that this country has borrowed its way into recession and now it needs to earn its way back out.

"This is a good Budget for Britain and for Reading."

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