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13 March 2019

Chancellor offers Making Tax Digital reprieve as dangers of chaotic no deal Brexit laid bare

Responding to publication of the Chancellor’s Written Ministerial Statement on the Spring Statement, Federation of Small Businesses (FSB) National Chairman Mike Cherry said:

“Against a backdrop of debilitating political uncertainty, the Chancellor has rightly responded to calls from the small business community today.

“Small business confidence has suffered an unprecedented slump in recent months as firms are unable to plan, invest and hire for the future. In the coming weeks, business owners will have Making Tax Digital, higher auto-enrolment contributions and fresh business rates hikes to contend with.      

“It’s good to see the Government offering a reprieve on this front, going further in its commitment to light touch enforcement of Making Tax Digital, following our warnings about the costs of rule changes. This commitment must be honoured. It should also be extended if unexpected issues with the new system arise.     

“Equally, extending the freeze on further roll-out of MTD from 2020 to 2021 is a welcome move. The Government should now rule out extension of MTD to firms below the VAT threshold until the end of this parliament at the earliest, in 2022. A full review of the roll-out will be needed in the months ahead.  

“The Chancellor’s statement lays bare the impact that a chaotic no deal Brexit on 29 March would have on public spending, economic growth and tariffs. Flooding the UK market with cheap imports at a moment when firms are trying to manage a sudden withdrawal from the EU would threaten the futures of many.  

“FSB fought hard for a lowering of the co-investment level for small firms taking on apprentices. A lot of small firms will be cheering the Chancellor’s decision to bring forward that reduction to next month.

“The UK’s late payment crisis destroys thousands of businesses every year. Today’s commitment from the Government to tackle it is much-needed. We’re particularly pleased to see the measure set out in our Fair Pay Fair Play campaign taken forward: making Non-Executive Directors responsible for supply chains through the Audit Committees of large businesses.

“We’ll be working with the Government on the forthcoming spending review, encouraging departments to obtain greater value for money by procuring more with small firms.  

“A review of the Insurance Premium Tax is overdue. This ridiculous levy flies in the face of the Government’s commitment to positive nudges. It’s a tax on good behaviour, encouraging small firms to take unnecessary risks.

“We look forward to inputting into the Competition and Markets Authority’s review of the digital landscape. Small firms must be supported to reap the full benefits of online platforms.”