The Forum of Private Business has called on the Government to make improving the climate for small businesses its number one New Year’s resolution for 2005.
The FPB said a number of key issues needed to be addressed as a matter of urgency if the burden on small businesses is to be relieved.
Its chief executive Nick Goulding said: “The Government needs to recognise that small businesses are the backbone of the UK economy and take steps to ease the burdens that bear disproportionately on them. The limited human and financial resources they have to call upon mean that fiscal and regulatory changes impact far more heavily on small businesses than their larger counterparts.”
The FPB’s ‘Top Ten’ major concerns are:
National Insurance Contributions:
The Chancellor must look closely at the impact of increases in National Insurance Contributions and their effect on the cost of employment.
VAT:
There needs to be a simplification of the rules on VAT. The Chancellor must consider implementing a reduced rate for labour-intensive services and look into the discrepancies surrounding hot take-away food from supermarkets.
Capital Gains Tax:
Business owners often depend on the transferring of their business for their pension. Retirement relief needs to be restored as the current rules lead to a depleted retirement fund for owners of small businesses.
Fuel Duty:
The Chancellor must abandon his deferred rise in fuel duty if small businesses are to remain competitive.
Business Rates:
The current level of business rate impacts disproportionately on small businesses and the introduction of new Small Business Rates Relief thresholds will do little to alleviate the situation.
Integrate National Insurance and PAYE: Administering two parallel sets of regulation increases the red tape burden; integrating the two would lead to significant savings in time and money for small businesses.
Inheritance Tax:
Building capital is important for both establishing businesses and enabling them to survive. The Chancellor must increase the inheritance tax threshold and broaden business relief.
Liability Insurance:
Employers’ Liability Compulsory Insurance has increased by as much as 400% in some sectors. Given such increases, the imposition of Insurance Premium Tax on Compulsory Insurance should be either abolished or significantly reduced.
The Right to Self-Employment:
Making self-certification of employment status easier would alleviate many of the concerns surrounding IR35 and 19% non-corporate contributions. This would create certainty in the minds of the tax payer and the exchequer regarding contributions.
Stamp Duty Land Tax (SDLT):
Businesses currently have to pay Stamp Duty on commercial property. This stifles a business’s ability to expand or move to new, more efficient premises. The Government’s decision to abolish SDLT on premises in ‘development areas’ is welcome, yet more needs to be done to encourage expansion and boost productivity.
Goulding added: “If the Government aims to make it a happy New Year for small businesses, it needs to address the issues that have been a major concern for our membership and the wider small business community throughout 2004.
“After extensive research, the FPB has identified a number of issues that, if tackled by the Government, would make it a prosperous New Year for the small business sector.
We hope that the Government takes note and acts to support a sector that contains four million small to medium-sized businesses, provides twelve million jobs, or 58% of the private sector workforce, and contributes 52.4% of the UK’s GDP.”
