Reported on Mon, 06 Mar 2006

Small and medium sized enterprises (SMEs) in the UK could be given a raw deal by the impending Budget, claims the Federation of Small Businesses (FSB), but a business loan can help to make significant investments in new areas.

The FSB, which represents the interest of almost 200,000 SMEs nationwide, has presented its own Budget submission to the Treasury, which makes a number of proposals for the chancellor to bear in mind.

The report calls on the current inspection regime for SMEs to be lessened, with the FSB claiming that it can be both intrusive and costly for companies.

Another major recommendation is that the government creates a less complex tax system, further drawing upon changes suggested in the pre-Budget report.

Neil Hamper, national tax chairman for the FSB, said: "The best way for the chancellor to achieve his policy objectives is to work with small firms to create a beneficial business climate encouraging growth and entrepreneurship."

Mr Hamper added that the importance of SMEs to the UK's economy could not be overstated.

"Small firms make up more than 99 per cent of all businesses in the UK and contribute 50 per cent of UK GDP. The tax revenue from our members funds the government's policy priorities, such as schools and hospitals."

A low-rate business loan can allow SMEs to make investments of a significant level in new areas to remain competitive.

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