Small business tax rise 'senseless'

News Article - 26 March 2007
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Raising the small business tax rate from 19 per cent to 22 per cent has been described as a senseless move by one organisation.

According to the Federation of Small Businesses, the measure, taken by the chancellor last week, was "disappointing".

Speaking to AccountancyAge.com, a spokesman said: "This is something that we didn't expect at all.

"Given that small businesses employ 50 per cent of the UK workforce and generate half of the gross domestic product, it doesn't make a lot of sense."

Moving to increase in small business tax was in direct opposition to the slashing of corporation tax rates from 30 per cent to 28 per cent.

The website claims that the measure has created the impression that lobbying by big business had "won out" compared with the lesser weight wielded by small companies.

Despite the tax cut, made to ensure Britain's attractiveness as an investment capital, the country will continue to be undercut by 18 of the 27 European nations, according to Mike Devereux of the Institute for Fiscal Studies.

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