Despite anger at the Chancellor’s surprise hike in corporation tax for small businesses yesterday, SME groups cautiously welcomed education and training measures in Gordon Brown’s budget.

Mr Brown announced that he would offer between £2,000 and £3,000 to firms taking on staff that needed basic training and said that the Government would do more to double apprenticeship numbers to 500,000.

“For small companies who take on an employee needing to acquire the most basic of skills, we will, in the period from now to 2011, offer £2,000 training help per employee and in some cases £3,000,” he said.

Education spending would rise by £4 billion next year and a further £3 billion the year after, he added, climbing to £74 billion by 2010.

Annual public investment in science would rise from £5 billion now to £6.3 billion in 2010 and there would be a £100 million competition to turn high-tech innovation in universities into commercial ventures.

A spokesman for the Federation of Small Businesses said that investment in education, the reduction in rates relief for empty commercial premises and a shake-up of employment tribunals would put a smile on small business owners’ faces – before it was turned to a grimace by the rise in corporation tax.

“A lot of people entering the workforce are lacking the most basic skills,” he said. So with more money for education and funding for employers to train young staff, businesses would be gaining “from both ends”.

“This is very welcome.”

R&D

However he added that the FSB was sceptical about any benefit in the increased threshold for research and development tax credit.

“Sometimes it’s more complicated than it’s worth,” he said, referring to the extra work required to try and claim the credit.

Nick Parker, director of tax at accountants Tenon, said that the 175 per cent relief on R&D - up from 150 per cent and extended to firms with 500 staff - was a good measure but in Tenon’s experience it was becoming increasingly difficult for companies to successfully claim the credit from HM Revenue and Customs.

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