Budget move to cut SME red tape welcomed

9 April 2003
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10 April 2003 | Robin Parker

CIPS has welcomed plans announced in today's Budget to help cut red tape for small firms.

The Department of Trade and Industry's Small Business Service is to spearhead an initiative to help small and medium enterprises (SMEs) get advice on their training and development needs.

Gordon Brown, chancellor of the exchequer, also proposed the creation of a "Small Business Investment Company" scheme, which will inject new capital into SMEs.

Firms with turnovers of £56,000 or less will now be exempt from VAT and 20,000 more SMEs will no longer be fined for late payment of VAT as part of plans to abolish 500 small business regulations.

Brown also unveiled a raft of VAT anti-fraud measures to impose joint liability for payment of VAT on both suppliers and buyers on specified goods and services.

He also extended security powers in investigations of any member of the supply chain in which actual or potential fraud is found.

Digby Jones, director general of the Confederation of British Industry, praised the chancellor for "resisting the temptation to slap more taxes on business, which would have delivered a serious blow to confidence."

Roy Ayliffe, head of professional practice at CIPS, said the support for "the engine room of the economy" was overdue, particularly for cash-strapped firms already burdened by last year's 1 per cent rise in National Insurance, which came into effect last week.

CIPS is currently preparing to launch its own guidance to help train SMEs in procurement.

But he branded "optimistic" the Chancellor's economic growth forecast of 2 - 2.5 per cent this year and 3 - 3.5 per cent in 2004-05.

Mark Berrisford-Smith, a senior economist at HSBC bank, agreed. He said Brown had done "virtually nothing" to help the economy, effectively giving away just £0.5 billion.

"His predictions for next year and right at the top end of economic forecasts, which average at less than 2.5 per cent next year," he said.

"If the consensus is right, he could have undershot borrowing figures by as much as £20 billion which would cause

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