Although the recruitment industry welcomed the delay on liability for contractors’ unpaid taxes (see separate story), other measures in the Budget have proved less popular.

Corporation tax will be reduced from 30% to 28% in 2008. But for small businesses, the rate is going up to 22% by 2009, from 20%.

Marcia Roberts (pictured), chief executive of the Recruitment and Employment Confederation, said: “The reduction in corporation tax to 28% is excellent news for business in general. However, as most recruitment businesses are small businesses, it is damaging that the small business corporation tax rate is rising to 22%. Recruitment businesses are not likely to be able to access the tax relief measures for businesses announced by the Chancellor, as recruitment businesses do not invest in research and development.”