The chancellor Alistair Darling is providing more help to small businesses, by extending the availability of the enterprise finance guarantee scheme by six months to September 2010.
Under the scheme, introduced in March, the government offers to guarantee 75 per cent of loans to small businesses who have a turnover of £25million or less.
The decision means that a further £500million of loans will now be available to small firms. Small businesses will have even better news, as they were told that the small company rate of corporation tax is to remain unchanged.
Darling also said that he will extend indefinitely the "time to pay scheme", which allows small firms to spread tax payments over a longer period – a measure that furnishes credit-starved companies with additional liquidity. The Chancellor announced measures in PBR which are aimed at helping businesses.
The Chancellor said he will leave the 2010 rate unchanged for 850,000 firms 'helping them until recovery is secured'. The Engineering Employers Federation welcomed news that the chancellor is to postpone the small companies' rate of corporation tax until April 2011.
In another measure aimed at helping businesses, Mr Darling said empty property relief on vacant premises with a ratable value of less than £18,000 will continue. This would leave 70 per cent of empty business premises exempt from the tax, he said.
Mr Darling also confirmed that VAT will return to 17.5 per cent on January 1, but ruled out any further increase. He also announced a fund of £5million, which will be allocated to help ex-service personnel set up their own businesses.
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