FSB’s Scotland Policy Chair, Andrew McRae, said:
“Small firms are crucial for economic growth, and we were glad the Chancellor said that clearly from the despatch box. That said, those businesses face serious challenges – not least through rapid hikes in costs and shrinking margins – and they’ll be examining some of the measures outlined in today’s statement closely.
“The cut in National Insurance rates for the self-employed builds on the reduction in Class IV contributions and abolition of Class II in the Autumn Statement. This will keep more money in self-employed pockets.
“On the VAT threshold, it’s estimated that by 2025, some 44,000 traders across the UK will be deliberately keeping their turnover just below the threshold. And, according to the Office for Budget Responsibility, this ‘bunching’ is costing the country hundreds of millions of pounds in lost economic activity. We’re therefore pleased that the Chancellor has listened to our calls to raise the threshold and increased it to £90,000.
“The extension and rebranding of the Recovery Loan Scheme – which since 2022 has been crucial in helping underserved small firms invest and grow – as the Growth Guarantee Scheme, is also a sensible pro-growth measure.
“There was also welcome news on the alcohol duty freeze, given the pressures on the pub trade and wider retail and hospitality sectors. It’s also good news that the fuel duty freeze will continue – especially for those who need a car or van to do business. And it’s good news for our members at the SaxaVord Spaceport in Shetland that they’re getting £10 million to support a launch in 2024.
“We welcomed the announcement of Investment Zones in Scotland last summer, having seen how they have been an important tool in easing the tax burden for smaller firms in England. It’s therefore good to see a redoubling of the government’s commitment to the Scottish Zones, by extending them from five to 10 years in duration.
“But there’s still a real gap when it comes to the crunch small firms are facing – and the growth, jobs and economic security small businesses provide is not something the country can afford to risk. While keeping the £5,000 Employment Allowance for the 10th year in a row is invaluable, it should have been uprated to keep pace with the National Living Wage – especially if employer tax thresholds remain frozen.
“All eyes in Scotland will now be on how the Scottish Government chooses to use the £295 million it is set to receive in Barnett consequentials. Calls from the hard-pressed retail, leisure and hospitality sectors for the rates reliefs enjoyed by their counterparts south of the border will become increasingly hard to discount.”