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BUDGET 2010: RBS and Lloyds will be made to lend £94bn

A number of measures were announced to help small businesses in the Budget, including pushing RBS and Lloyds to lend to small businesses.

Chancellor of the Exchequer Alistair Darling said that over the next year, RBS and Lloyds between them would provide a total of £94 billion of new business loans, nearly half to smaller firms.

Business rates will be cut for one year from October to help “fledgling businesses”.

Mr Darling is also doubling the Annual Investment Allowance to £100,000 and added that most firms will be allowed to deduct in the first year, from taxable profits all investments in plant and machinery.

Mr Darling said the move on business rates would mean a tax reduction for more than half a million small businesses in England - 345,000 of which would pay no business rates at all.

Mr Darling also announced that he was doubling the entrepreneur’s relief for capital gains tax.

At present, the first £1 million of lifetime gains are taxed at a lower rate of 10 per cent, rather than the main rate of 18 per cent. That threshold will now be increased to £2 million.

Federation of Master Builders director general Richard Diment said: “The Chancellor paid a lot of attention to the needs of small businesses which is encouraging as they have been badly hit by the recession.

'The cut in business rates from October will be a help, as will the delayed introduction of the fuel duty increases. However, these are only temporary measures and future tax increases such as those planned for National Insurance will have a negative impact on small businesses, jobs, and growth.”