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Businesses happy with tax levels shocker says KCP

SME businesses believe that tax levels will be set at the right level for growth when George Osborne’s corporation tax changes kick-in, according to research conducted by Leeds-based Key Capital Partners (KCP).

Prior to George Osborne announcing that corporation tax will be set at 20% from 2015, more than half of respondents to KCP’s Business Growth Panel* stated that the level of tax was a major barrier to growth.

When asked the same question this week, only one in 10 felt that the new 20% level would restrict their growth.

Tony Bucciero at Templine, a blue-collar temporary recruitment business, with offices in Leeds, Wakefield, Pontefract, Doncaster and Sheffield, said: “The Government has clearly signalled its support for businesses of our size and the changes to corporation tax helped give us the confidence to invest.

“We’ve just completed an acquisition and expect more over the coming months and years.”

Despite the positive reaction to the tax cut, respondents to KCP’s Business Growth Panel are still far from optimistic, with a slight decrease in overall confidence.

Concerns over demand for products and services has increased, with more than half of SME business leaders claiming this is their biggest barrier to growth, compared to just 25% at the end of the last quarter.

Owen Trotter, managing partner at the independent mid-market equity house Key Capital Partners, said: “Small and medium business leaders across the UK have clearly welcomed the government’s stance on corporation tax. It’s not unusual for a tax cut to be cheered but it is the first time we’ve had businesses tell us that it needn’t be even lower.

“Yet there are still concerns in the market over levels of demand. Companies are having to work harder to bring new clients and customers on board and while there are lots of positive noises, it is clear that there’s no easy ride to success at the moment.”

* KCP’s Business Growth Panel is a quarterly survey of SME business leaders from across a range of sectors and locations in the UK.

This was posted in Bdaily's Members' News section by Mark Lane .