The FPB also believes that the prospect of Supplementary Business Rates to fund the Cross Rail project in London will open the floodgates of more taxation, with smaller businesses footing the bill for local authority projects.
The FPB says that it is inviting small businesses to register their opposition to the Government's latest move, which, it claims, will see smaller businesses hit in the pocket, whilst big businesses are rubbing their hands after being handed more tax breaks.
Abolishing the Capital Gains Tax Taper Relief system, including the 10 per cent rate levied on some smaller firms' accrued assets, and replacing it with a flat rate of 18 per cent, will, in fact, mean many bigger firms' payments are reduced. Mr Darling also announced that corporation tax would be slashed – but only at the higher rate.
Smaller businesses will continue to pay the 22 per cent rate, which was raised from 19 per cent in the previous budget.
Petition
The FPB is inviting small firms to support its petition which says:
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Small companies are the lifeblood of the UK economy and Changes to Capital Gains Tax announced in the Pre-Budget Report (October 2007) are a slap in the face for entrepreneurs who have invested time and effort, and taken considerable risks in setting up their own businesses.
Meanwhile, the prospect of Supplementary Business Rates, as set out in the Pre-Budget Report, is the thin end of the wedge of more taxation, raising revenue from firms to fund local authority projects.
We call upon Mr Darling to take action now to reverse his decision, and make the UK an attractive and competitive place to start up in business.
Business rates
The Government's White Paper on Supplementary Business Rates heralds the introduction of a new power for local authorities in England to raise extra taxes on top of the national business rates. It is designed to fund local infrastructure and economic development projects.
The Mayor of London, Ken Livingstone, has already announced that he wants to levy a business rate supplement of two pence in the pound from businesses in Greater London to fund the Cross Rail railway project. The Government will legislate to enable local authorities to follow suit and introduce an additional tax on properties worth £50,000 or more from April 2010.
FPB's Campaigns Manager, Matt Hardman said: "We are opposed in principle to supplementary business rates. Our members believe that they already pay enough taxes. Once that door has been opened, it will be the thin end of the wedge – what is there to stop the Government changing the threshold of £50,000 and again increasing taxes for smaller businesses, as it has done with Capital Gains Tax?"
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