Next Chancellor urged to reduce tax and red tape
Gordon Brown’s successor as Chancellor of the Exchequer needs to ease the tax burden and cut down on the amount of red tape faced by small businesses, a new survey has said.
A study of 350 of its members carried out by the Forum of Private Business found that, for the small firms that took part, taxation and the administrative demands of complying with employment regulations ranked as higher priorities than unfair competition, skills and training, and promoting investment.
Respondents were asked to list according to relevance the main issues on which the incoming Chancellor should focus in order to help small businesses develop and grow.
Rebecca Leavers, the FPB’s research manager, said: “Reducing the tax burden was the top priority, with 43 per cent saying action needs to be taken by the new Chancellor.”
She continued: “Some 29 per cent want a reduction in red tape to be put first, whilst 11 per cent want an end to unfair competition to come top of the list. In contrast, just five per cent think skills and training should be the priority, and only three per cent promoting investment.”
On ways of reducing the tax burden, 91 per cent voted for a reduction in employers’ National Insurance contributions, and 63 per cent backed a reversal of the increase in the lower band of corporation tax from 19 per cent to 22 per cent.
On ways of lightening the workload involved in complying with business regulations, some 85 per cent argued that the administration of PAYE and National Insurance should be integrated, while 60 per cent advocated the creation of a mechanism to monitor and evaluate the Government’s plans to cut red tape.
Third on the list of priorities for FPB members was eliminating unfair competition. Here 76 per cent supported moves to combat the problem of late payment, 65 per cent wanted a simplification of the dispute resolution process and 56 per cent believed that a set number of Government contracts should be allocated to smaller businesses.
Only five per cent thought that skills and training is the area to which the Chancellor should first direct his or her attention. On training, 80 per cent of respondents backed the introduction of tax credits to encourage professional development, with the same proportion asking that further education should be more focussed on the needs of business. Some 60 per cent believed small businesses should have more influence on the formulation of skills initiatives.
Last in the list of priorities for FPB members was promoting investment. In this area, 78 per cent said they wished to see the extension of first-year capital allowances to all plant and machinery, while 50 per cent wanted to be able to insure and protect intellectual property as well as physical assets at economic premiums.
Despite the low level of importance ascribed to skills and training, Ms Leavers said there was strong evidence of a failure to engage smaller businesses in this area: “Our members believe more must be done by the Government, not only to understand what smaller businesses want from new employees, but also to reduce the cost of training current staff.”
Ms Leavers concluded: “There are more than four million smaller companies in the UK, employing over half the private sector workforce. They are an integral part of the economy, and whoever succeeds Gordon Brown as Chancellor must put them at the forefront of policy.”
