PBR: Corporation tax deferred for small businesses

Primarily, in his speech today (9 December), Alistair Darling said he has decided to defer the increase in corporation tax for smaller companies.

This will leave the 2010 tax rate unchanged for 850,000 small businesses, helping them until recovery is secured.

Mr Darling also said he will increase the government's 'Time to Pay scheme' indefinitely, and has increased the threshold for empty property relief to help small businesses.

In his speech Mr Darling said the Time to Pay scheme has helped more than 160,000 businesses spread their tax payments over a timetable they can afford.

He said: "They get additional time when they need it most – and, because firms continue trading, the likelihood of companies paying the tax owed increases.

"So I have decided that the scheme will be extended for as long as is needed."

Meanwhile, last year the chancellor temporarily increased the threshold for empty property relief to help small businesses.

This year he has decided to extend this further so that, for 2010 to 2011, empty commercial properties with a rateable value below £18,000 will be exempt from business rates.

As a result, 70 per cent of all empty properties will continue to be exempt.

Elsewhere, the chancellor also revealed plans to help small and medium businesses who are still encountering difficulties getting loans.

He said the treasury was working to secure a contribution from the major banks towards a £500m Growth Capital Fund, which will invest specifically in small business.

Furthermore, Mr Darling said he planned to extend the Enterprise Finance Guarantee scheme which was launched in January and offers government guarantees on bank loans to businesses.

He said: "Today I have decided to extend this scheme for a further 12 months which will guarantee a further £500m of loans to small businesses.

He said: "As recovery gets underway, we need to ensure that SMEs get the credit they need, and we are working with the banks to make sure that happens."