Small businesses across the UK are calling on Chancellor George Osborne to simplify and reform the current tax system in next week’s emergency budget.
The Federation of Small Businesses (FSB) has recently asked the government to “widen the scope of reform to radically simplify the tax system and improve incentives to encourage investment”.
The FSB praised the Seed Enterprise investment scheme, which currently provides tax relief and entrepreneurial relief for individual investors backing small early-stage companies, stating that it is “having a positive effect in stimulating growth”.
However, FSB policy director Mike Cherry has recently called for a “radical” simplification of the current tax system including further support for the Seed Enterprise Investment Scheme.
The growing pressure on the chancellor has been led by a “gear shift in ambition and delivery of infrastructure” - one of the FSB's main requests to ensure that the Treasury’s business rate system review “delivers a new, fully reformed system that is flexible, fair, transparent and efficiently administered”.
Through updating economic and public finance forecasts, Osborne’s second budget of the year will disclose the scale of the cuts ahead for both public services and welfare.
The FSB stated that small businesses are ‘enjoying record levels of revenue’ and planning to increase and invest in employment. Recent figures in the Financial Times show that ‘Small business productivity grew by 1.4 per cent in the last quarter of 2014’.
Alongside plans to reduce the deficit and restore economic stability, the FSB also sees boosting productivity as a main priority. FSB chairman John Allan says:
“The budget is an early opportunity for the chancellor to demonstrate his pro-enterprise credentials by backing small business.”
“This will require [a] focus on areas such as raising skills, simplifying the tax system [and] encouraging exports.”
There are calls for more effort to be made in stimulating productivity through investment in infrastructure, and just some of the proposed improvements include better transport links and broadband.
During last year's budget, along with other small business federations, the FSB voiced the need for significant changes to business rates, and repeated their ongoing calls for more support in vocational training.
Time will soon tell if any of these pleas will be answered.
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