Tax is an issue that affects all small businesses. What small firms need above all is a simple and stable tax system.
The tax system needs to be:
- clear and specific;
- properly evaluated prior to implementation to avoid unintended consequences;
- easy for employers to comply with and to administer; and
- used to collect taxes, not administer benefits.
The FSB has welcomed the recent debate on taxation, but urges all political parties to put more emphasis on small business taxation in their policy proposals. It must be remembered that a significant minority of small businesses are unincorporated and the tax system must provide a level playing field between incorporated and unincorporated businesses.
FSB Budget Submission
FSB NICs proposal - Growing the Economy
The FSB urges the Government to remove the need to pay Employers National Insurance for all businesses that currently employ between zero and four staff, which increases its head count by three staff in the first full financial year after the election (2011/2012). Read Growing the Economy
Emergency Budget
The FSB wrote to the Chancellor on 15th June 2010 urging him to help small firms while also tackling the massive UK debt issue. We proposed measures on National Insurance Contributions, Capital Gains Tax and VAT (amongst other things) which would all help stimulate the economy and thus cut into the debt.
Administrative Burden
The FSB is concerned about the administrative burden the tax system has on small firms and the impact of payroll administration on employers. The FSB firmly believes that the tax system should not be used to administer employee payments. This should be the Government's job and the FSB is very concerned about the Government propensity to hand over an increasing number of these responsibilities to employers.
Another area of concern is the increase in VAT fraud. While we acknowledge that the Government is trying to tackle this issue, we are concerned that the compliance burden will hit small businesses disproportionately.