THE Government's decision to abolish the remains of its zero per cent tax break on profits generated by small businesses will prove to cripple already struggling companies.

Alan McCann, tax partner at Hollins-based DTE, the leading professional services group, said: It is now likely that the cost of maintaining company status, filing accounts, dealing with red tape and the heavier regulatory burden, will now outweigh the tax savings.

"Instead of offering the tax break which has provided much needed relief to many small businesses, Mr Brown is instead offering a 50 per cent first year tax allowance on capital expenditure, which is a far cry from the original more enterprising incentive."