UK tax regime must change, FSB warns

Nia Williams

February 16, 2010

More than half of small businesses surveyed by the FSB-ICM January survey panel say UK taxes have prevented them from taking on more staff, as employment statistics due tomorrow are expected to show a rise in unemployment.

Businesses in the South East feel particularly strongly, with 64% saying taxes have a negative impact, closely followed by the North West at 60% and London at 59%. Across the country the figure is 58%. Concerned that the temporary boost to employment figures provided by the Christmas period is coming to an end, the FSB is stepping up its call to Government to freeze National Insurance Contributions and provide a National Insurance rebate for small businesses with fewer than 50 staff that take on more employees during 2010-11.

In late 2009, the FSB-ICM ‘Voice of Small Business’ Annual Survey showed that 19% of small businesses would take on new staff over the next 12 months in order to achieve business objectives, with London (27%), Northern Ireland (25%) and the North East (23%) the most likely to do so.

John Wright, National Chairman of the Federation of Small Businesses said: “The January employment figures showed a welcome fall in the number of people out of work but we fear the severity of the recession will begin to be evident when the latest figures are released. What the UK economy needs is real action to get more people into work, especially under-25s, who make up a large proportion of those currently unemployed.

“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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