A tax expert has called yesterday’s Budget “a mixed bag of corporation tax changes for SMEs and larger businesses”.

Tina Riches, national tax partner at Smith & Williamson, the accountancy, investment management and tax group, said: “On the plus side for many businesses, there will be welcome changes for the relief of losses. Broadly speaking, losses can currently only be carried forward for offset against profits arising from the same stream in the same company.

“Companies often find they are restricted in how those losses from previous years can be used. This is particularly difficult for smaller businesses with more than one activity, such as some agricultural businesses.

“It is welcome news to hear that the UK will bring its system more into line with its G7 neighbours, so that some of these restrictions will fall away from April 2017. It means that far fewer SMEs will end up with trapped unusable losses in the future. For companies with profits over £5m there will be some restrictions on this, but the government only expect this to affect about 1% of UK companies.”

The Budget saw a tax rise on loans by small companies to shareholders.

“The current 25% tax charge levied on loans made by close companies (broadly those controlled by five or fewer shareholders or any number of directors who are shareholders) to their shareholders will rise to 32.5%,” said Riches.

“Making loans to shareholders is increasingly problematic, not least because the rules in this area can be complex. The increase in tax here will only apply to loans made on or after 1 April 2016. Given the tax is repaid on the repayment of the loan in question, it represents a cash flow consideration only, but potentially an increasingly serious one.

“There will be many family owned businesses who get caught by this change.”

Riches addressed changes to interest relief. She said: “For many years, the UK has been an attractive place to do business due to the beneficial rules on relief for interest. These rules are now due to change for large multinational businesses. There is an argument that this will help level the playing field between SMEs and larger business.”

George Osborne also announced a clampdown in employee shareholder shares (ESS), which came into force at midnight.

“Employees giving up statutory employment rights in exchange for ESS may face CGT charges in the future,” explained Riches. “A new lifetime allowance of £100,000 tax-free gain on ESS comes in to effect.

“Hitherto those with an initial share value of no more than £50,000 would pay no tax on the gain arising on the disposal of shares in their employer, no matter the size of the gain.

“This major change has the potential to have a huge impact on the attractiveness of these arrangements, affecting awards made from midnight.”

Mark Easy, commercial insurance specialist at NFU Mutual, said the Budget would benefit SMEs. He said: “It has been a triumphant day for many of our small and mid sized commercial customers as the Chancellor announced changes to even out the playing field between the small and multinational businesses operating in the UK.