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Balancing the UK’s budget – will Mr Darling get it right?!

Balancing the budget - will Alistair Darling make the right choice?

Balancing the budget - will Alistair Darling make the right choice?

Small businesses await Alistair Darling’s Pre-Budget Report (PBR) with a certain amount of trepidation. I suppose the question on many of our lips is:

With this economic recession ever in the background, with lending at its weakest and consumer confidence still low, will Mr Darling make the right choice?

However, what exactly is the right choice for small businesses? Let’s take a quick look at some of the suggestions put forward by the Federation of Small Businesses (FSB):

1. National Insurance rebate in 2010 for small companies with less than 50 new employees who create new jobs.

2. No corporate tax increase – although current speculation is that this is likely to see an increase. It’s important to note that a drop in corporation tax could encourage multinational companies to remain in the UK and may encourage other multinationals to relocate to the UK – boosting our economy.

3. No increases in employers’ national insurance contributions and getting rid of plans to increase this in 2011.

4. A delay to the VAT increase in January 2010 from 15 – 17.5% (there has been speculation that this could increase by as much as 20% – let’s hope not otherwise it’s highly likely that we will see an even bigger drop in consumer spending.

5. Provide automatic business rates relief.

If Alistair Darling makes the right choices regarding the budget this could make all the difference in helping to boost our flailing economy. However, if not, we could be in for a longer economic slump than any of us anticipated. So pray to whatever deity you worship that he makes the right choice, I know I will be!

Other useful links:

BCC forecasts low expectations prior to pre-budget report

Pre-budget report – Q&A on what businesses can expect

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Photo by Danilo Rizzuti

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