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The Chancellor Alistair Darling has announced a serious of measures to help businesses as they struggle to cope during the economic downturn.

In his Budget, he revealed he will increase help for businesses facing temporary financial difficulties and an extension of the loss carry-back rules for businesses – essentially losses can be carried back on company books. Francesca Lagerberg, head of tax at Grant Thornton, welcomes the news that the loss carry-back rules for businesses have been made more flexible. "The measures announced today come at a time when many businesses are incurring losses and have insufficient cashflow. Being able to carry back losses up to three years with more flexibility will allow losses incurred now to be offset again past profits, resulting in a cash flow boost."

David Thomson, chief executive of Close Invoice Finance, says: "We are very encouraged that the Chancellor has provided some much needed relief to UK business, specifically to improve cashflow. We were also pleased that the Chancellor has recognised the value of trade credit insurance. Too often businesses fail because of a domino effect of bad debt rather than them being fundamentally unsound."

But there were some things that the Budget missed for small business: John Wright, Federation of Small Business national chairman, says: "In what has been the most crucial budget in decades, the FSB is disappointed that small businesses have been largely ignored. We are very disappointed that this budget will do nothing for those firms which are doing their best to hold on to their valued employees. A Government funded wage subsidy for short-time working would have been a real help but was totally ignored.

"Small firms will also be disappointed not to have received the benefit of automatic rate relief. This will have boosted small businesses to the tune of £400m. Also, with a quarter of business failures due to late payment and around £38,000 owed to small businesses at any one time, Companies House should have been given more powers to name, shame and fine companies which fail to pay on time. The Government has missed an opportunity to save thousands of businesses and the jobs they create."

SOURCE: Grant Thornton, Close Invoice Finance, FSB, 22/04/09

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