EXPANDING Huntingdonshire firms have been ‘kicked in the teeth’ by the new Chancellor of the Exchequer, George Osborne, according to some business leaders – but his first, ‘emergency’, austerity budget has elsewhere been well received.

EXPANDING Huntingdonshire firms have been 'kicked in the teeth' by the new Chancellor of the Exchequer, George Osborne, according to some business leaders - but his first, 'emergency', austerity budget has elsewhere been well received.

London and the South East - which includes Cambridgeshire - have been excluded from the £5,000 National Insurance exemption for each of the first 10 employees of new businesses.

John Bridge, chief executive of Huntingdonshire Chamber of Commerce, says the Chancellor is discriminating against the very areas that will lead the recovery.

"That these three regions will be a driving force in leading the UK out of recession was shown by the region's resilience during the downturn. So why is the Chancellor putting additional hurdles in our way?"

Measures to encourage job creation (and therefore output) by small businesses will not apply where they would bring most benefit, he said.

"The reductions in Corporation Tax and Small Companies Tax will be broadly welcomed, but the reductions in other business allowances from April 2012 are already leaving businesses wondering whether they will really be any better off," he said.

"The defining question has to be: will any business actually benefit?"

But the move to increase VAT rather than employers' National Insurance Contributions, as lobbied for nationally by the British Chambers of Commerce, was welcome, he added.

Huntingdon accountants Haines Watts said most of the other business measures were likely to go down well. The firm's principal, Simon Laskey, said: "For local businesses, there was plenty of good and often unexpected news. With effect from April 2011 the employers' national insurance threshold will rise by £21 per week beyond indexation, making the costs of employing staff less of a financial burden.

"The main rate of corporation tax is to fall from 28 per cent to 27 per cent next year, with a further annual reduction for three more years until the rate reaches 24 per cent. Likewise, the lower rate of corporation tax will reduce to 20 per cent. It is expected that 850,000 small businesses will benefit."

The previous Government had proposed plans to abolish the beneficial 'holiday lettings' rules for capital gains tax purposes, but the Chancellor said these measures would remain.

"The tourism industry can expect to benefit from the more favourable capital gains tax treatment on retirement or sale. We did see some restrictions to capital allowances for all businesses, which will mean that, although the overall allowances available for capital expenditure will not change, it will take longer to achieve tax relief. The appropriate rates are a reduction from 20 per cent to 18 per cent for plant and machinery and from 10 per cent to eight per cent for long-life assets.

"Furthermore, the annual investment allowance amount has been reduced from £50,000 to £25,000, which means that 100 per cent tax relief will be available only on the first £25,000 of capital expenditure. The measure is designed to focus this generous tax relief on small businesses."

"An unexpected announcement for business owners was the increase in the 10 per cent Capital Gains Tax rate for entrepreneurs for lifetime gains of up to £5million in place of the previous £2million limit."