Reported on Thu, 23 Mar 2006

The reaction of the UK business community to yesterday's Budget announcement by chancellor Gordon Brown has been mixed, but a business loan could offer small businesses with one solution to a disappointing Budget.

Despite Mr Brown revealing plans to create a new board to review the impact of taxation upon businesses, to further develop links with overseas economies and to enhance research and development (R&D) tax credit for small firms, the chancellor has come in for some criticism from business experts.

Sir Digby Jones, director general of the Confederation of British Industry, said: "Steps to reduce red tape, expand R&D tax credits and boost UK trade and investment have our wholehearted support.

"But business will be disappointed that the opportunity truly to improve UK competitiveness has been lost."

The chancellor also announced that £100 million would be made available for enterprise capital funds, but Stephen Hayward of accounting firm BDO Stoy Hayward, remains unconvinced.

"However this is somewhat tainted by the fact it was reduced in the last budget from 50 per cent to 40 per cent, which does beg the question why the chancellor has flip-flopped by changing the relief up and down on such a regular basis. Small businesses would benefit from continuity and reduction in red tape, rather than continually having to reassess the tax impact of their investment options."

A business loan could allow UK small firms to invest in new areas and encourage growth.

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