JUST 2 per cent of Scotland's small businesses believe this week's Budget will bring good news for Britain's entrepreneurs, a new report has revealed.
The findings, published just three days before Alistair Darling delivers his first Budget, came as business leaders stepped up the pressure on the government for a reform of the UK's corporate tax system.
In a further setback for the Chancellor, D
arling was today confronted with a warning from a leading accountancy firm that Britain is in danger of being left behind as a desirable investment location.
The Bank of Scotland report on the attitudes of small businesses, also published today, revealed that nearly half of Scotland's entrepreneurs think that Wednesday's Budget will have a negative effect on them. A similar proportion believe it will not make any difference.
The pessimism demonstrated by small business owners underlies a belief, held by six in ten, that the government is specifically targeting small business as a means of raising tax revenue.
Ivan Matvia, head of Bank of Scotland business banking said: "Scotland's entrepreneurs clearly have little faith in the government's ability to deliver a Budget that will support and promote enterprise".
He added: "If small businesses are to remain the lifeblood of a growing economy, then it's up to the government to provide a boost to Britain's small business owners."
Compiled over the last nine months, the CBI report claimed that the ever-rising business tax burden and the failure of the tax system to respond to increasingly global business activity had created a corporate tax system which it says is unsustainable in the long-term.
The group is calling for a headline corporation tax rate of 18 per cent within eight years, as well as tax calculated on the basis of existing company accounts – scrapping the current system where firms have to maintain two sets of books.
It has also put forward the idea of a non-political, independent tax law commission, established to monito tax law.
CBI director-general Richard Lambert said: "Our traditional tax system is no longer fit for purpose. The UK government should clear away the thick layer of silt that has built up."
Meanwhile, the Ernst & Young report reveals that Britain has fallen from the fourth most preferred investment location to the sixth. The UK has been overtaken by India and Russia.
The full article contains 397 words and appears in The Scotsman newspaper.
