EXPERTS in small business affairs gave a mixed reaction to a Budget they said included steps in the right direction but failed to provide the big boost the sector needed.

The Chancellor's decision to proceed with the expected cut in the higher rate of income tax, to 45% from April 2013 from 50% currently, won applause following repeated claims it was stifling entrepreneurs.

"I think it's good news," said Mark Houston, a partner at Johnston Carmichael accountants, who reckoned the change would make the UK a more attractive place to do business.

A specialist in entrepreneurial business, Mr Houston said the change could also encourage owners to devote more energy to growing firms and less to reducing their exposure to the 50% rate.

The Forum of Private Business and the Federation of Small Businesses welcomed the fact the Chancellor also confirmed he will cut the standard rate of Corporation Tax payable on company profits faster than expected.

The tax payable on annual profits of more than £300,000 will fall from 26% currently to 24% next month, rather than the expected 25%.

It will fall by a further percentage point next year and the year after.

Mr Houston said the change would benefit many firms, especially when groups are taken into account.

The Forum was also pleased the Chancellor talked about merging the income tax and National Insurance systems, which it said would be a first step in long-overdue reforms to the tax system for small firms.

However, Andy Willox, Scottish policy convener of the FSB, noted Mr Osborne did not cut the 20% rate payable by firms that make less than £300,000 profit.

Minnows who have annual turnover of up to £77,000 will be able to move to a cash accounting system, which will mean they will not have to pay tax on their unpaid invoices.

But while this will make life simpler, the rate of tax they pay will not change.

Mr Houston said early-stage businesses would welcome a proposed increase in the Enterprise Management Incentive Scheme grant, which will provide tax breaks on share options awarded to staff worth up to £250,000 from £120,000 currently, as a recruitment tool.

Exporters will want to hear more about the Chancellor's pledge to expand UK Export Finance, which insures businesses again non-payment by overseas customers, and set out "new plans to help smaller firms in new markets".

Businesses in Nigg, Irvine and Dundee will probably be delighted the centres are to be granted Enterprise Zone status. Businesses in such zones in England get relief from business rates and generous tax breaks on their investments.

However, Mr Houston concluded: "There was not a huge amount there for small businesses."

Sector champions were disappointed the Chancellor did not provide more help for firms that are grappling with big cost increases.

The Chancellor ignored calls for him to cut the rate of Employers' National Insurance contributions, described as a tax on jobs.

The FSB's Mr Willox, said: "Businesses that held hopes for some relief at the petrol pump will be bitterly disappointed – with a 3.02p per litre fuel duty increase to take effect on August 1 as planned.

"We would have liked to have seen moves to cut unemployment and boost revenues by giving a National Insurance Contribution holiday to employers who take on new staff."

Scottish Chambers of Commerce gave a "broad welcome" to the Budget, but said the Chancellor should have done more to boost demand.

Liz Cameron, chief executive of Scottish Chambers of Commerce, said: "The Government should show the ambition displayed by a number of our international competitors and reduce VAT to 5% for the whole of our tourism and leisure industry – a move that would guarantee real benefits for one of our most valuable industries."