Only one in fourteen (7 per cent) small business owners believe that Wednesday's Budget will bring good news for Britain's entrepreneurs.

New research from Bank of Scotland Business Banking, which examines small business expectations for the forthcoming Budget, paints a gloomy picture when it comes to hopes for a Budget that will promote enterprise in Britain.

Nearly half (45 per cent) of Britain's entrepreneurs think that this year's Budget will have a negative effect on small business, while approximately the same number (42 per cent) believe it won’t make any difference.

A taxing time for small business

The pessimism demonstrated by small business owners towards this year's Budget underlies a belief by two thirds (66 per cent) who feel that the Government is specifically targeting small business as a means of raising tax revenue.

Approximately the same number (68 per cent) believes that the tax regime is unfair.

At last year's Budget, the Chancellor increased the small companies' rate from 19 per cent to 20 per cent from 1 April 2007, with further increases to 21 per cent in 2008 and to 22 per cent in 2009.

Findings from Bank of Scotland's research show that over a third (35 per cent) of small businesses are still not aware of these changes to the tax regime.

In addition, only three in ten (28 per cent) are both aware of the increases and have made allowances for them in their budgeting.

More support and understanding required

The uneasy relationship between small business and the Government betrays a lack of belief from entrepreneurs that the Government understands what makes them tick.

Only one in seven (13 per cent) believes that the Government is aware of the needs of small business and is working hard to help them thrive.

More than nine in ten (93 per cent), on the other hand, believe that the Government should be doing more to support small businesses.

Ivan Matviak, head of Bank of Scotland Business Banking said that Britain's entrepreneurs clearly had little faith in the Government's ability to deliver a Budget that would support and promote enterprise.

"Having been on the receiving end of last year's incremental tax increases, it's not surprising to see that small businesses feel particularly hard done by when it comes to the tax regime. If small businesses are to remain the lifeblood of a growing economy, then it's up to the Government to deliver some good news and provide a boost to Britain's small business owners," Matviak concluded.

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