SMALL firms have welcomed the Chancellor's relaxation of Vat rules but complain he has not done enough to cut red tape. In his Budget speech, the Chancellor paid tribute to the contribution of small firms to the British economy, saying they provided 55 per cent of all jobs.

He wanted to see "a more enterprising Britain" and a "culture of entrepreneurship in every community". He cut the small firms tax rate from 20p to 19p, abolished the corporation tax starting rate for firms with taxable profits of less than £10,000, claiming that Britain had "the most favourable corporation tax regime of any advanced country".

Mr Brown also offered £30 million to encourage more small firms to go for the Investors in People standard. But Barbara Richards, regional treasurer for Kent's Federation of Small Businesses, which has 7,000 members in Kent and Medway, said: "Our members wanted less red tape and to pay less tax. Now the tax has been raised they won't be too pleased about that and as for less red tape I can't see any sign of that apart from the Vat flat rate. It doesn't look as though the administrative burden is going to get any easier for them."

She welcomed the scrapping of automatic fines for late payment of Vat, the widening of flat rate Vat payment rules, and easing of bad debt relief. Frozen vehicle licences and fuel duty would be welcomed. Small brewers would welcome lower beer duty. But members would face added complexity from the new family tax credits.