The Forum of Private Business (FPB) has slammed Chancellor Gordon Brown’s Budget as “smoke and mirrors” that will do little but create more red tape for small businesses to deal with.

The Chancellor reduced Corporation Tax from 30 to 28 percent but announced that Corporation Tax for smaller companies will be raised from 20p this year to 22p in 2009.

The FPB, which represents 25,000 small and medium-sized businesses across the UK, said tax cuts aimed at big business will do nothing to ease the burden for the majority of the private sector.

FPB chief executive Nick Goulding said: “The Chancellor has used smoke and mirrors to disguise the fact that there is nothing in this Budget to support small businesses. In fact, the resulting confusion created by some of his initiatives will serve only to increase the red tape burden.”

He added that the measures will deliver for larger firms not for smaller businesses.

“The reduction in the main rate of Corporation Tax will benefit larger firms, not the smaller businesses that make up the majority of the private sector,” he said. “The changes made for smaller firms will serve only to further burden them.”

A scheme announced with Tesco, Sainsbury’s, Asda, B&Q, Marks & Spencer and the British Retail Consortium as part of the Budget, aimed at helping people complete training and find work, also came under fire from the FPB.

FPB campaigns manager Victoria Carson said it will add to the unfair competition within the retail sector: “Why does the Chancellor find it necessary to support dominant retail chains? They already enjoy the perks of their size and wealth. More attention should have been given to relevant business education in schools.”

The FPB highlighted a number of “missed opportunities” for small businesses.

It said the Chancellor had failed to amend the Low Value Consignment Relief (LVCR) offshore VAT loophole, re-introduce the nil-rate starting band on Corporation Tax for the first £10,000 of profits, introduce a more efficient VAT registration process and link the national minimum wage to the retail price index.

The FPB added that the Chancellor should have combined VAT and company tax inspections to follow those recommendations already presented in the O’Donnell Review, re-introduced tax exemption on computers for employees, focused further education on the needs of businesses and set aside a percentage of public procurement contracts for smaller businesses.

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