The head of challenger Hampshire Trust Bank has called on the UK Chancellor George Osborne to hold off taxing small business any further in the UK Budget on March 16.

"2016 is a melting pot of political and economic uncertainty," said chief executive officer Mark Sismey-Durrant. "The threat of Brexit combined with home-grown regulatory changes means that businesses and consumers may be tempted to batten down the hatches and choose not to invest in future growth,"

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Sismey-Durrant said that research conducted by Hampshire Trust indicated that confidence was beginning to falter for decision makers in SMEs, as indicated by growing cash reserves.

"Our business savings research found the country’s SMEs are already building up their cash reserves, driven by the perceived need for greater ‘cash buffers’ and concerns about the volatility of the economy. We need to build much greater business confidence if the country is to succeed and therefore the Chancellor needs to be cautious about introducing too much taxation as it will cause uncertainty and for the economy to slow down.

"Instead the Chancellor needs to spend his way through the next period – as recommended by the OECD – to install confidence in both companies and consumers and do everything in his power to create a period of steady economic growth for the year ahead."

Business rates

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Last year the UK government launched a consultation and review on business rates, and Sismey-Durrant called for clarity.

"Business rates are one of the biggest costs our SMEs face and their payment forms a critical part of financial planning," said Sismey-Durrant.

"We hope the government’s business rate review brings more clarity on future business rate reform. In order to encourage SMEs to invest in their businesses in 2016, we need a period of steady economic growth and a context of increased certainly over the future business landscape. Less taxation and red tape is crucial to ensure both companies and consumers invest in their futures."