Craig Beaumont is Head of External Affairs UK at the Federation of Small Businesses (FSB). This is a sponsored post by the FSB.
There are 5.5 million small businesses in the UK. Confidence levels have fallen, due to two main drivers – rising costs, and a weakening domestic economic outlook. Small firms are looking to the Budget as the moment to change this.
With a weaker UK economy and growth gathering pace in the US and the Eurozone, we would like to see a Budget that helps business connect to these growth markets. Twenty per cent of our members already export, but this could be doubled with export tax credits or export vouchers to help small firms reach new customers.
In the March Budget, there was welcome emergency relief announced for small businesses facing huge problems over the delayed business rates revaluation. Getting that help from local authorities in England to businesses worst affected has been a huge slog, and so we want to see Philip Hammond name and shame the last councils that have yet to re-bill their businesses and then issue a letter of instruction.
We seek immediate reforms to the rates system, too: bringing forward the annual increase from RPI to CPI; more frequent revaluations; and the end to what we have dubbed the ‘Staircase Tax’ – the unintended decision that means a small business that occupies two floors will now have to be assessed as two separate business premises, and so losing small business rates relief.
The self-employed are still smarting from the last Budget, which included the attempt to target them with a two per cent National Insurance hike. As well as trampling over the Conservatives’ pledge at the previous election, it was an anti-entrepreneurial measure, which took no account for the risk-taking when people set themselves up in business. This time, freelancers are worried about a sudden expansion of IR35 tax rules. This is not the time for another tax grab on strivers.
There must also be no tax hike on lower-earning businesses. Suggestions of a wholesale expansion of VAT by bringing down the £85,000 turnover threshold has caused considerable worry. This would not only add to cost pressures, but would burden them with more time-consuming administration.
Finally, we want to see support for small housebuilders, and for National Insurance changes to help small employers recruit those furthest from work.
All-in-all, we want to see a pro-business budget that helps small firms to grow. Five priorities set out here would boost exports, tackle business rates, protect the self-employed, increase housing and create jobs. These are decisions that can be made, now. They would boost the economy, now. And they would put us in the best place to make the most of Brexit. 5.5 million small business owners will be keenly watching the Chancellor next Wednesday.