Tax rises ‘will be disaster for entrepreneurs’

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The Institute of Directors has told the chancellor to give entrepreneurs more support, not higher taxes, to drive economic recovery.

Entrepreneurs needed to be put “at the heart of the recovery”, with employers’ tax cuts, investment tax breaks and extra funding for start-ups and scale-ups, it said before Rishi Sunak’s budget next month.

With reports of possible rises in corporation tax and capital gains tax or even a windfall tax in the budget, Jonathan Geldart, director-general of the institute, said: “Tax hikes risk choking off the economic recovery before it has even got started. It is paramount the existing package of grants, loans and reliefs is extended. A cliff-edge in support would be disastrous for business.”

He added that company owners, who had received little direct support during the pandemic, deserved a “one-off grant package”.

The IoD’s budget proposals include a temporary cut in employers’ national insurance contributions, targeted business rates relief for the hardest-hit companies and extending the present measures such as furlough “as long as restrictions continue”.

Restrictions on the Enterprise Investment Scheme, which provides tax breaks for scale-up investment, should be eased and the maximum investment relief for the Seed Enterprise Investment Scheme should be doubled.

The institute also called for Brexit adjustment vouchers to help businesses with the disruptions and costs of trading with the European Union.