A one year delay in the move to quarterly tax reporting for some small firms was probably the highlight for the sector of a Budget that was described as an attack on entrepreneurship.

The Chancellor said he would exempt firms with turnover below the threshold for Value Added Tax registration from the requirement to file tax returns every three months until 2019.

The proposal formed part of the Government’s Making Tax Digital initiative, which is meant to simplify the system and make sure firms pay the right amount.

But Mr Hammond said business organisations and MPs had expressed concerns about the burden the move to quarterly reporting would place on firms, in terms of time and investment in IT systems. The delay will cost the Government £280 million.

Mark Houston, managing partner at Johnston Carmichael chartered accountants’ Glasgow office, said there was not much in the Budget for small firms but the delay in the reporting change was very welcome.

He said quarterly reporting is one of the biggest issues facing firms. It is likely to result in hefty compliance costs and may require firms to get advice from their accountants more often.

The Scottish Policy Convenor for the Federation of Small Businesses, Andy Willox, said: “The decision to delay the quarterly tax reporting requirements for firms underneath the VAT thresholds buys both our smaller firms and his government a little bit of time.”

But Mr Houston warned: “Quarterly reporting is still coming to lots of companies next April and lots are not ready.”

He noted The Budget included an increase in the turnover threshold for VAT registration to £85,000, from £83,000, from April. The increase was much smaller than he had hoped for.

The FSB said the Chancellor’s decision to increase the rate of Class 4 National Insurance paid by self-employed people amounted to squeezing the go-getters.

The rate will increase from nine per cent to 10 per cent from April 2018 and to 11 per cent the following year. The Chancellor said the measure would bring the treatment of self-employed people into line with employees.

But Mr Willox said it would put extra pressure on hundreds of thousands of Scottish self-employed people. He added: “Increasing the tax burden on plumbers, cleaners and musicians, while decreasing corporation tax isn’t the right move. Many people who work for themselves have relatively modest incomes and don’t get paid holidays and sick pay like employees.”

The Corporation Tax rate will reduce as expected to 19 per cent in April, from 20 per cent, and to 17 per cent in 2020.

Scottish Chambers of Commerce chief executive Liz Cameron noted the Chancellor decided to cut the amount of dividends people can receive tax free from £5,000 a year to £2,000 from April next year besides changing the NIC rate. She said: “These are measures that will make life that little bit more difficult for individuals and businesses.”

The Chancellor said the relief gave company owners an unfair advantage over employees.

Mr Houston criticised the decision to change the relief soon after it was introduced, in 2016.

The Chancellor disappointed hopes research and development tax credits might be increased or the scope of the scheme extended.

But, Mr Houston welcomed a pledge by Mr Hammond to cut the administrative burdens around the scheme. The cash refunds offered under the scheme can be very valuable.

The FSB’s Mr Willox noted Mr Hammond announced a £435 million package of measures to ease the impact of the recent revaluation of properties for business rates in England and Wales. Pubs with a rateable value of less than £100,000 will get a £1,000 discount on their bills in 2017.

The measures won’t apply in Scotland where the Scottish Government capped increases in bills following a campaign by The Herald to highlight the problems caused for firms by the latest revaluation in Scotland.