CORPORATION tax for small businesses should be cut in the budget, according to a Peterborough-based accountant.
Chancellor George Osbourne’s budget should slash corporation tax for smaller firms in line with the 25 per cent drop enjoyed by larger firms since the coalition government came to power, says a senior executive at V&A Vigar & Co LLP.
Since May 2010, the government has announced four separate cuts in corporation tax for firms making in excess of £300,000 profit a year, with the latest set to see the rate fall to 21 per cent next year from its 2010 rate of 28 per cent. During the same period, corporation tax for smaller firms has fallen by less than five per cent, from 21 per cent to 20 per cent, sparking criticism from small business owners.
Amanda Vigar (above), managing partner at V&A Vigar & Co LLP, said she would like to see the chancellor cut the fiscal burden for smaller firms in line with the tax reductions enjoyed by larger firms.
Ms Vigar said, “The cuts in corporation tax seem designed mainly to attract multi-national firms with overseas headquarters to invest in the UK. While that is welcome, it does very little to help small businesses, many of which are valiantly battling through as the UK economy carries along the road to recovery.
“Small businesses make up about 99 per cent of the UK’s economy, and rising business rates, energy bills and employment costs are all squeezing their profits.
“It also seems a little unfair that large and extremely profitable firms should pay virtually the same percentage in tax as your local corner shop, butcher or baker. That would be the equivalent of asking part-time teaching assistant to pay the same percentage of tax as a multi-millionaire entrepreneur.
“In his upcoming budget, I hope the chancellor listens to and considers the smaller businesses which make up the backbone of the UK’s economy and on which more than half of all private sector employment depends. We cannot afford to neglect smaller firms if we are serious about keeping Britain on the road to economic recovery.”