Seven out of ten small businesses concerned about the budget

Only one in ten (11%) understand what the proposed changes in the Pre-Budget announcement will mean for their business

On 12 March this year, Alistair Darling will make his first Budget announcement, the first time in ten years that the statement has not been delivered by Gordon Brown.

Whilst it may go down as a day in history for the Chancellor, the UK's SME population is not as thrilled.

Research from Alliance and Leicester Commercial Bank has shown that seven in ten (70%) small businesses are either worried or apprehensive about the forthcoming Budget announcement.

Small businesses already have an indication of what lies ahead with proposed changes to tax having been made following the March 2007 Budget and the Pre-Budget statement made in October last year.

These include increases in corporation tax rates, legislation to prevent income splitting, changes to Capital Gains Tax including abolishing taper relief and increases in fuel duty.

However, despite warnings about possible tax changes, its worrying that only one in ten (11%) of SMEs thoroughly understand what the proposed changes will mean for their business.

Nearly two thirds (63%) of small businesses who do not understand what the proposed changes will mean feel negative about the proposed changes and more than half (54%) say their biggest area of concern is the increase to fuel prices.

Over half (52%) cited more regulation and red tape as an area of worry.

More than a third (36%) consider corporation tax rates as an issue and nearly a quarter (24%) are anxious about the abolition of taper relief on Capital Gains Tax.

Steve Jennings, Director of Business Banking at Alliance and Leicester Commercial Bank, said: "With economic uncertainty, small businesses are starting to feel the pinch and the Budget is another concern for the UK's 4.5 million SME population.

Our research shows just how concerned businesses are of the Budget and it's worrying that so many don't truly understand how the changes will affect them.

"With good planning, businesses can prepare for these financial threats.

Reviewing outgoings is just one area where businesses can save considerable amounts of money.

Look at regular costs such as utilities and bank charges and ensure you shop around for the most competitive deals.

By researching the deals available and switching to a more competitive offer, businesses can save thousands of pounds each year." Businesses looking for information and advice on the Budget have a number of sources available to them.

The survey reveals that nearly two thirds (64%) consult an accountant, two quarters (56%) search the internet and over a third (38%) refer to TV and newspaper reports.

Alliance and Leicester Commercial Bank has launched www.interest-challenge.co.uk where businesses can see how much extra interest their surplus funds could be earning.

The amount of interest small businesses are missing out on could be working hard building contingency funds to help cover future tax increases.

For further information on the accounts available, small business owners should call 0800 587 0800 or visit www.alliance-leicestercommercialbank.co.uk.

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