The big business announcement was the reduction in the main rate of corporation tax from 30 per cent to 28 percent. However, the rate for small companies is set to rise in stages from the current 19 per cent to 22 per cent by 2009.

'Tax cuts aimed at big business will do nothing to ease the burden for the majority of the private sector,' says Nick Goulding, chief executive of the Forum of Private Business.

The Chancellor said the increase was needed to reduce the difference between small companies and the self-employed and that the money would be put back into 'legitimate businesses investing for the future.'

But Goulding insists that the changes announced for smaller firms and the resulting confusion created by some of Brown's initiatives would serve only to add to their burden.

Peter Shearon, chairman of property development and import business More Than Group, based in Nelson, Lancashire, agrees.

The company, which employs 15 workers, has a turnover of £7 million.

Shearon says: 'The rise in corporation tax for smaller firms stuns me. It is so much harder for low profit companies to survive.

'We are always short of resources and profits give you something to invest in your business and make it stronger.'

Other important measures announced in the Budget included a rise in the rate of research and development tax credits for small companies, from 150 per cent to 175 per cent.

Michael Richards, chief executive of payroll software and services provider Snowdrop, based in Witney, Oxfordshire, welcomed the increase, but expressed concerns.

He says: 'The benefit of the rise in this tax credit will depend on the definition of what constitutes research and development and the way the incentives are run.

'In the past, the credit system has been ideal for biotech companies, but not as beneficial for the less "ground breaking" technical, software companies like ours.'