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Small firms get 1bn and tax deal

Struggling small businesses are being supported with a package of measures, including a 1bn fund and an offer for SMEs to take “as long as they need” to pay taxes.

Chancellor Alastair Darling said that banks would be encouraged to do all they could to help finance small businesses.

He congratulated RBS for its recent pledge to help SMEs and warned other banks that “this should be the benchmark to all UK banks”.

Darling said the 1bn SME finance scheme would enable small businesses to borrow between 1,000 and 1m.

He said UK banks would take on 4bn from the European Investment Bank to support small firms, with 1bn available next year.

Small businesses will be able to offset tax on current profits against losses in three previous years rather than the current one-year limit.

Next year’s planned 1p increase in small business corporation tax to 22p has been postponed for a year.

Aifa director general Chris Cummings says: “IFA firms, like other small businesses, have been affected by the financial turbulence. That is why this measure to reduce the tax burden for small business is the right thing to do.”

But the British Chamber of Commerce warned that all businesses will be hit by the 0.5 per cent increase in Nat-ional Insurance contributions from 2011.

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