12-10-2007
AIFA expresses concern for SMEs
News from Simply Business - independent providers of business insurance, business finance, landlords insurance, buy-to-let mortgages & commercial mortgages.
The UK's Association of Independent Financial Advisers (AIFA) has criticised this week's pre-Budget report for its impact on small to medium-sized enterprises (SMEs).
According to comments made by Chris Cummings, director general of AIFA, although there was confirmation in Tuesday's report of a reduction in corporation tax levels, this had been previously announced by the previous chancellor Gordon Brown in 2007.
Under these proposals, from April 2008, corporation tax will be reduced by a total amount of 2p.
Moreover, it was also announced that the corporation rate paid by SMEs will increase to 22 per cent, a rise of three per cent from current levels. However, the somewhat controversial decision to modify the regime governing capital gains tax - including the removal of taper relief in favour of a stand levy of 18 per cent - was broadly welcomed.
"Over recent years, we have seen the total tax take from small businesses increase [and] this pre-Budget report has done nothing to reverse this trend," said Mr Cummings. "SMEs have spent far too long subsidising the tax avoidance of larger businesses and we would have welcomed further assistance for [them]," he added.
Although Mr Cummings cautioned that it would be necessary to fully examine the details of the capital gains tax regime changes, his only real concern would be that it would lead some to make investment decisions based primarily upon short-term objectives.
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