Next week’s Budget should put in place radical measures aimed at helping small firms spearhead economic recovery, according to the Forum of Private Business (FPB).
In its Budget submission, the forum argues that a complete rethink of workplace legislation is needed in order to allow smaller companies to lead the country out of recession.
The FPB also wants to see several key tax incentives put in place to encourage small businesses to employ more people and grow.
Additionally, the not-for-profit small business support and lobby group is calling for confusion over HM Revenue and Customs’ (HMRC’s) flagship tax deferral scheme to be cleared up.
Its submission, entitled ‘Rebuilding the UK Economy’, contains four key proposals.
Firstly, the forum is calling for the Government to implement a comprehensive regulatory review. This would involve looking at workplace legislation from the point of view of the businesses that have to comply with it and removing or simplifying problematic regulation wherever possible.
Secondly, it wants to see plans to increase the small companies’ rate of corporation tax scrapped. This would provide a higher level of certainty for small firms and help recession-hit businesses maintain their profitability.
Thirdly, the planned increase in National Insurance Contributions (NICs) should be scrapped. The forum has joined a coalition of business groups opposing the increase and has also gone further by calling for NIC reductions for micro businesses which take on new staff.
Finally, the forum is calling for certainty to be provided around HMRC’s Business Payment Support Service. Confusion around the terms of the programme and its interaction with the existing Time to Pay scheme has caused problems for some business owners and the forum wants this to be cleared up.
Commenting on the Budget submission, the Forum of Private Business’ policy representative Matthew Goodman said: “This Budget is about getting the environment right for businesses to take advantage of the opportunities that 2010 will bring.
“It’s often been said, but small businesses are the backbone of the British economy. By focusing on real change in a few key areas, the Government could help itself because small firms would then pull the country out of the economic doldrums.
“The forum believes that a comprehensive regulatory review is necessary in order to take stock of the myriad new laws which have been imposed on businesses in recent years. The policymakers are usually well-meaning, but often fail to take into account the cumulative impact regulations have on small businesses.
“We also believe the planned rises in NICs and the small companies’ rate of corporation tax should be scrapped straight away. What’s more, we believe that these are entirely realistic goals. The Government does have a huge deficit to pay off, but it won’t accomplish that through imposing ever-higher taxes on an ever-dwindling number of businesses.
“Give businesses some certainty on compliance and let them keep more of their taxes for the next year, and watch how the money starts to move again. We all know that more businesses doing more trade and employing more people will lead to more income for the Treasury in the long run.
“That’s the only way we can ultimately get the country back into the black.”
Source: FPB
