Swindon & Wiltshire News
Ambitious Autumn Budget needed to avoid bleak winter for businesses – FSB
The government needs to bring forward radical interventions to address an unprecedented long-term slump in small business confidence, slowing economic growth and a widening trade deficit when it publishes the 2019 Autumn Budget on November 6, according to small business lobbying group the FSB.
Writing to the Chancellor, Sajid Javid, the Federation of Small Businesses has called for a major reduction in business rates bills for small firms, as thousands struggle to stay afloat amid spiralling operating costs.
FSB recommends that the Retail Discount – which allows small retailers with rateable values of up to £51,000 to claim a 33 percent discount on their rates bills – be increased to at least 50 percent, made permanent, and extended to small firms operating in other sectors, including manufacturing.
It is also calling for the threshold for Small Business Rates Relief to be increased from £12,000 to at least £30,000. The threshold has remained largely static in recent years, despite the Rateable Values that determine rates bills surging in many parts of the country, particularly on high streets in large towns and cities.
The tax is set to generate £25 billion for the government in the current financial year, up more than £200 million compared to last year.
FSB national chairman Mike Cherry said: “Small businesses have been left hamstrung by uncertainty for the past three years. We need to see the Chancellor step-up to the mark next month with measures that will re-inject optimism into the small business community and enable growth. Otherwise, we’re in for a very bleak winter.
“Business rates reform must be a priority. This unfair, regressive tax – which hits firms before they’ve made their first pound in turnover, let alone profit – continues to threaten the futures of small firms all over the country. We’ve secured important business rates mitigations in the past, but now is the time for a significant reduction in small business bills.
“Fundamentally, the business rates tax serves as a disincentive to invest. You spend money on bettering your property – by installing solar panels, or improving workplaces, for example – and the next thing you know your rates bill has shot up. It’s ludicrous.”
FSB’s Autumn Budget submission also highlights the increased strain that rising employment costs are putting on small firms.
Following April’s increase in minimum wage rates and employer pension contributions, the number of people in employment fell by 56,000 last quarter. The latest Small Business Index shows hiring intentions among small firms are at a two-and-a-half year low and falling.
FSB recommends that the £3,000 discount on national insurance bills available to small firms through the Employment Allowance be increased each time a new member of staff is taken on, with an additional £1,000 made available for every new recruit until a £13,000 annual cap is reached.
Elsewhere, the group is calling for direct financial assistance for small firms impacted by Brexit uncertainty in the form of £3,000 export vouchers, which could be used to claim back the costs of expert advice, market research and trade roadshows.
Other FSB Autumn Budget submission recommendations include:
- Delaying the roll-out of changes to where responsibility for determining IR35 status lies in the private sector, set to take effect in April 2020
- Freezing fuel duty and the Insurance Premium Tax
- Ensuring all small businesses have access to broadband download speeds of at least 10 Mbps by 2021, following the launch of FSB’s ‘Lost Connection’ report last week
- Protecting co-investment in apprenticeships amid a drying-up of apprenticeship levy funds and concerns that the system will run out of funding entirely by 2022
- Delivering the 2017 Conservative Manifesto commitment to a national insurance holiday for small employers who take on those furthest from the labour market
Mike Cherry added: “While the helicopter view of our employment market shows it has held-up relatively well over the past few years – as firms increased headcounts rather than invested for the long-term – small employers are now under significant costs pressures, with little help from government when it comes to tackling low pay.”
