Boost to small business in emergency budget

It is expected that today’s budget will boost small enterprise with the government pledging ‘help for business that doesn’t stifle investment.’

A plan to increase lending from banks to businesses is also expected, coupled with a five-year plan that will reform corporation tax.

George Osborne’s plans to increase bank lending to small and medium sized businesses was described last week by Vince Cable as a ‘key bottleneck’ in the current system.

The chancellor is said to have to have listened carefully to business chiefs and their concerns about scrapping investment allowances. This was being considered in an effort to finance other cuts in corporation tax.

Plans for cuts in rates of corporation tax and a commitment to reduce and simplify the tax system is expected to be widely discussed.

Efforts to enforce lending agreements made by the two part-nationalised banks, Lloyds Banking Group and Royal Bank of Scotland will also be revisited.

Ministers have also indicated their willingness to extend the enterprise finance guarantee, which offers state backing for bank loans to smaller companies, beyond its current March 2011 expiry date.

This is seen by many small and medium sized businesses as the key to the future prosperity of the sector.

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