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UK Tax regime unfair on small business

Small businesses in the UK are unhappy with two particular aspects of the current tax regime and are calling on the Government to help them. Not only do the feel that the complexity of Britain’s tax system puts them at an unfair disadvantage, but they also believe that UK taxes are preventing them from employing the extra staff they need to grow their businesses.

In a poll from the Forum of Private Business (FPB) nearly 70% of small businesses said they believe the tax burden placed on them is unfair, with over 50% of the 100 businesses that took part believing the system favours big companies. Phil McCabe of the FPB commented, “Our members believe that they are bearing an unfair tax burden because of the moderate sizes of their businesses.”  He went on to explain that, “the complexity of the British tax system is not only time-consuming and frustrating, but it also puts small firms at an instant disadvantage. Big companies have the expertise and resources to understand the system and minimise their tax burden. For most of our members, hiring an outside tax consultant represents a significant cost few can afford, especially in the midst of a recession.”

A separate poll carried out by the Federation of Small Businesses also revealed disquiet with how the UK tax system treats smaller business, and it was clear that those surveyed felt that UK taxes had inhibited recruitment. The survey showed that more than half of small businesses questioned say that UK taxes have prevented them from taking on more staff. Though the January unemployment figures showed a slight sign of improvement, the fear is that things may get worse again before they get any better. Businesses in the UK are anxious that there is as much Government help for them as possible to punch through these tough times and that, of course, includes help with taxation.

Businesses in the South East feel that they were particularly affected, with 64% saying taxes have a negative impact. In the North West and London the figures were 60% and 59% respectively, and nationally the figure stood at 58%.

John Wright, National Chairman of the Federation of Small Businesses offers the Government this advice, “What the UK economy needs is real action to get more people into work, especially the under-25s, who make up a large proportion of those currently unemployed.” He continues, “a cut in National Insurance Contributions would encourage small businesses to take on more staff and grow their business. Small firms can help to strengthen economic recovery if they are given a chance to grow and flourish, but they will need a helping hand.”


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