The UK’s fragile economic recovery will be under threat if firms are hit with extra tax burdens by the new Government, the chairman of Croydon’s Federation of Small Businesses(FSB) has said.

Jeremy Frost urged the Government to concentrate on promoting business growth rather than suck money from small and medium sized firms to help shave £6bn from this year’s Budget.

Two-thirds of FSB members responding to a nationwide survey called for a cut in fuel duty to help business growth, and more than a third said the personal tax threshold should be increased.

A total of 46 per cent said legislation to force big businesses to pay invoices within 30 days would provide a boost for smaller firms.

New chancellor George Osborne has warned a failure to tackle the UK’s record £163bn deficit could be disastrous for the country, and confirmed he would reveal the details of his ‘emergency Budget’ on June 22.

He also pledged to place the responsibility for economic forecasts on a newly formed Office for Budget Responsibility to dissuade governments from fiddling the figures.

Mr Frost said: “We welcome the news that the Government will set out a clear spending review in the coming weeks ahead of the Budget as this is an issue of concern to many small business owners.

“We also welcome the creation of the Office for Budget Responsibility.

“Small firms are keen to see how the Government will tackle the deficit while also ensuring businesses can grow, further strengthening economic recovery.

“We urge the Government not to place further taxation burdens on small businesses at a time when the recovery is fragile and would like to see measures announced which will promote business growth and encourage employment.

“There are still underlying issues between the banks and small businesses and access to finance and credit.

“The Government must put pressure on the banks to lend to small firms so that they can get on with the job in hand.”