The Federation of Small Businesses has welcomed the decision by HMRC to offer tax assistance to businesses that have been affected by the recent floods.

The Chancellor of the Exchequer Alistair Darling has announced measures to allow small firms to pay tax bills in instalments or defer payment as a result of hardship arising from the flood. HMRC has also agreed to waive interest and penalties for any deferred period.

“All assistance is gratefully received as the flood waters recede and this will go a long way to ensuring that more businesses can remain solvent until they can trade again,” said FSB national chairman John Wright.

The FSB has also launched its own £500,000 relief fund designed to allow members to access interest-free loans to help them through the process of recovering from the floods.