While the economy may be in significantly better shape than it was when the Coalition came to power, there is still a significant degree of business uncertainty. The forthcoming General Election and the possibility of an EU Referendum are making it difficult for many small businesses to plan ahead.
With further austerity measures on the horizon and deficit reduction remaining a key priority, the Chancellor has little room to manoeuvre. But we have made it clear that there are some key things Mr Osborne should look to do to provide the much-needed confidence boost many small businesses would like to see.
A fairer and simpler tax system
Top of our list of member wants are calls to create a fairer and simpler tax system.
Many small businesses feel that further measures are needed to create a fairer tax system that ensures that ALL businesses pay their fair share.
Suggested changes include:
• Continued steps to close tax loopholes and assessing whether the largest companies in the UK pay a reasonable level of taxation
• The introduction of the compulsory publication of tax records of the leading companies in the UK
• Measures to limit the influence of companies that use artificial tax avoidance methods
• A reversal of the decision to authorise HMRC to directly debit bank accounts of small businesses
• The introduction recommendations from the Office of Tax Simplification
• The introduction of tax incentives for SME exporters.
Better payment practices
Late payment also remains a key concern for small firms, and many want to see further moves to introduce better payment practices, hence our calls to introduce the automatic addition of late payment charges for council invoices, as well as further moves to introduce e-invoicing across the public sector.
Reduced red tape
Despite government’s pledge to reduce red tape, the Forum’s most recent Cost of Compliance Survey revealed that it still costs the UK’s small and medium-sized enterprises (SMEs) £19.1 billion last year.
Therefore the Forum would like to see the Chancellor make further moves to tackle the ongoing regulatory burden many small firms face.
Some of our suggestions include increased support from government bodies to help reduce the administrative time burden for small businesses and financial support for small businesses to offer shared parental leave.
In addition, with many facing new pension costs in the coming months, we also sent a clear message to the Treasury that now is not the time to raise the National Minimum Wage above inflation.
Help to export
As the recovery continues the government continues to see exports as key to future economic growth. However many small firms remained unconvinced of the business benefits and still feel that it remains prohibitively costly and that little incentive is given to encourage SMEs to explore overseas trade possibilities.
Therefore the Forum’s submission continues to press the Treasury to consider introducing tax incentives – along the lines of the research and development credits – to encourage the growth needed to help the UK hit its export target of £1 billion by 2020.
With the election looming large it is likely that the emphasis of the government’s final set piece is highly likely to focus on continued concessions for households. We will be watching closely and hope that the Chancellor will not lose sight of the need to provide small firms with a much-needed confidence boost.
