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Wednesday
Oct282009

Chancellor urged to make life easier for business

Small business lobbyists and pressure groups are urging the government not to raise taxes and to create a more settled business environment in the forthcoming Pre-Budget Report.

Two influential groups have released studies today that they say show that keeping business taxes at the same rate or even reducing them would be the best policy. The Enterprising UK 2009 survey revealed 84% of private business owners want a bigger say in government to introduce stability that will help managers and directors make informed, commercial decisions. 

"Private business is calling for a stable, certain tax environment in which to conduct their business successfully," said Mary Monfries, head of UK private business at PwC. "Reducing tax rates would be a challenge in the current economic climate, but a reduction in the rate of change and uncertainty should be easier to deliver." 

Almost half  (45%) of business owners said the government did not listen to the privately owned business community.

The Federation of Small Businesses is suggesting Chancellor Alistair Darling not to raise taxes on small businesses. 

Raising taxes for small businesses would ultimately cost the UK billions of pounds and hundreds of thousands of jobs, a new independent report by the 

Centre for Economics and Business Research (CEBR).

Small firms already face an increase in employers' National Insurance Contributions (NICs) in April 2011. The CEBR tested a computer simulation of what would happen if another 1p was added to employers' NICs, paid by small and medium sized enterprises.

The result was that NICs increase would cost 57,000 jobs but make little or no difference to public finances. These job losses would cost the Treasury around £900m in unemployment allowances and benefits.

The FSB wants the Government to make it easier for small businesses to employ staff and tackle rising unemployment and drive the economy out of recession. Cutting payroll taxes has been identified as the most important change the Government could make to encourage them to take on more staff.

 



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