Give growth a chance
The FSB is urging the government to avoid overtaxing small businesses in its drive to raise tax receipts. With VAT set to return to 17.5% on 1st January, could an increase in National Insurance Contributions be the nail in the coffin for small businesses?
What will April’s National Insurance Contribution increase mean for your clients?
As we have often remarked in Cashflow Update, small businesses are the powerhouse of the UK economy. Making up 99% of our nation’s businesses they are the mainstay of UK employment. With the Government anxious to find ways to decrease the escalating public sector deficit, they’re looking to the private sector to increase tax revenue.
But many small business leaders are warning the Government against such a move at an early time in the recovery process. The Federation of Small Businesses (FSB) appointed the Centre for Economic and Business Research (CEBR) to carry out a study exploring the possible effects of any increases in business taxation at this delicate stage of economic development. Their findings contained some concerning predictions.
As you’re no doubt aware, the Government is currently planning to increase employer’s National Insurance Contributions (NIC) by 0.5% in April 2011. The CEBR estimated the knock-on effect in terms of unemployment could be around 57,000 jobs. This would cost the state around £900m in Jobseekers Allowance and other benefits. The FSB is appealing to Alistair Darling to postpone the NIC increase to allow small businesses to employ more people to drive the country out of recession.
FSB’s national policy chairman, John Walker, said “ This research by the CEBR shows that taxing small businesses to help reduce the public sector deficit is a dead-end that will instead cost us dearly in jobs and economic growth” .
Well aware that ‘interesting times’ are leading to an ever-changing marketplace, another of Andrew’s key objectives in the coming year is communicating the breadth of Cashflow UK’s expertise and product offerings. He was keen to point out that the company offers much more than just factoring and invoice discounting, with other options such as export finance, stock finance and trade finance also available to business owners and managers.
To find out more or take advantage of Cashflow UK’s expertise in order to assist with your clients’ cash flow requirements call 0800 132 156.
