Many small businesses were disappointed by the chancellor's budget speech yesterday, but now the British Chambers of Commerce (BCC) has predicted that it may bring lasting difficulties.
The BCC has predicted that the rise in small business tax rates from 19p to 22p will boost the Treasury's income by £820 million.
David Frost, director general of the BCC, said: "This budget could be damaging for small and medium sized business in the long term.
"Whilst the chancellor has offered incentives for investment he has also increased the amount of tax that those covered by the small companies' rate have to pay by over £800 million.
"This is a substantial rise and will hit those looking to grow their business."
He added: "As a chancellor who champions enterprise and acknowledges the importance of small business to the UK economy, many of our members will feel let down by today's Budget."
Amidst the bad news for SMEs, the chancellor also announced that an extra £100 million will be invested to encourage energy efficiency among smaller firms.
Natalie Evans, head of policy at the BCC, said: "SMEs are keen to become more energy efficient as a greener workplace creates a more efficient and profitable business."
