With his Budget Report just weeks away, business has called on the chancellor to take more steps to reduce the regulatory burden on small firms.
In its Budget submission to the Treasury, the Federation of Small Businesses (FSB) has stressed that Gordon Brown can begin to help small businesses grow by scaling back an inspection regime that is “disproportionately heavy” on smaller companies.
Inspections can be extremely intrusive and costly for small firms, the FSB said, and the compliance burden is too excessive when considering the amount of revenue raised for the Government.
The FSB has also called for simplification of the tax code by streamlining and consolidation, rather than making amendments to existing legislation.
While praising Brown for taking steps toward a clearer system in his Pre-Budget Report, the FSB says the small business community must know how the government is planning to do this.
“The best way for the chancellor to achieve his policy objectives is to work with small firms to create a beneficial business climate encouraging growth and entrepreneurship,” said Neil Hamper, FSB national tax chairman.
“Small firms make up more than 99% of all businesses in the UK and contribute 50% of UK GDP. The tax revenue from our members funds the Government's policy priorities, such as schools and hospitals.
“We hope that the Chancellor and other policy makers will examine our proposals closely, because it is in the UK's economic interests that they do so.”
The FSB has also urged Brown to limit future national minimum wage rises to the rate of inflation. It claims that above-inflation rises have put pressure on companies, particularly those outside of London and the South East.
Among its other suggestions, the FSB’s submission includes plans for a zero rate VAT trading scheme, where VAT is only charged at the final stage of consumption and a moratorium on annual increases in the business rates multipliers to bring the tax more closely in line with lower levels elsewhere in Europe.
