Weekly Brief

Week 09 of 2010      Friday 5 March 2010

FSB Budget submission
The FSB has discovered that Flat Rate VAT has risen to a higher level for the smallest businesses and is urging the Government to review the issue in the Budget in which we are also calling for a freeze in National Insurance Contributions. Read the press release, the FSB's Budget Submission 2010 and coverage in the Daily Telegraph.

Say ‘no’ to NICs rise
The FSB and other business organisations are urging small firms to sign a petition to say ‘no’ to the planned one per cent rise employer National Insurance Contributions. Read the press release, sign the petition and read the coverage in the Financial Times.

BIS Pubco report
A Department of Business Innovation and Skills committee has published a report highlighting its concerns about the imbalance of power between pub companies and licensees, saying that unless things change in the next year, pub companies will have to face the Competition Commission. With over 50 pubs closing per week, the FSB welcomed the report but urged the Government to take the issue to the Competition Commission now, rather than wait a year. Find out more and read the coverage in the Daily Mail.

UK tax regime stopping business expansion
The FSB-ICM ‘Voice of Small Business’ survey panel found that three-quarters of respondents believe their businesses are failing to grow because of complex tax rules. Read the press release, survey results and coverage in the Financial Times.

Graduate Internship Scheme
The Graduate Internship Scheme launched earlier this year is up and running and Universities are offering businesses a subsidy of around £100 per week to take on a graduate in the next year. If you are interested, or can promote this scheme to other small businesses, please contact the national single point of contact on 0845 072 7597 or click here.

Shopkeepers needed
Wall to Wall TV is looking for a baker, butcher, grocer and their families to feature in a new, prime-time BBC ONE series charting the history of the British High Street from 1870 – 1970. If you are interested, get in touch on 020 7241 9232.

The Business Inspector
HMRC is urging small businesses to watch ‘The Business Inspector’, a new four-part TV series launching on Five at 8pm on Wednesday 17 March. It aims to remind small businesses of the importance of keeping good records. Each week presenter Hilary Devey, will visit two small businesses to advise them how to improve processes, systems, strategy and direction.

Reduce regulation
The FSB is calling for small businesses to tell us their biggest regulatory bug-bears so we can tell Government what regulation needs to be changed or removed completely. Find out more and give us your views.

Follow the FSB on Facebook
You can now follow the activities of the FSB by joining our brand new official fanpage on Facebook. Become a fan to view regularly updated events, photo galleries, lobbying information and interactive content.

Like what you read?
Bookmark this page using social media sites such as Delicious, Digg, reddit, StumbleUpon, and keep in the loop about the FSB’s activities by subscribing to our RRS feed and following us on Twitter.

FSB News Release
PR 2010 11

Issue Date: Thursday 4 March 2010

Government stealth tax on small businesses discovered by FSB

The FSB has discovered that 48 per cent of business sectors have seen a rise in the level of flat rate VAT they pay

The Federation of Small Businesses (FSB) has discovered that the flat rate VAT charged by HMRC to the smallest of businesses has risen to a higher level and the FSB has urged the Government to review the issue in its Budget submission to the Chancellor this week.

Flat rate VAT is charged to the smallest businesses with a turnover of less than £150,000 and aims to minimise the red tape around administering VAT providing a slightly lower rate which varies dependent on the sector the business operates in.

FSB analysis of the rates has found that businesses operating within the agricultural services sector and membership organisations have seen rates increase by a huge 2.5 per cent. For grocers, newsagents, tobacconists and clothing shops rates have risen by 1.5 per cent as have those for businesses involved in social work.

At the other end of the scale, estate agency and property management services will see their rate decrease by 0.5 per cent and computer repair services by 1.5 per cent.

In its Budget submission, sent to the Treasury this week, the FSB has called for the flat rate VAT to be immediately reviewed. Other key asks in the submission included:

• A complete freeze on National Insurance Contribution (NIC) rises, and a reverse on the Government’s plan to increase employers’ NICs in 2011

• An immediate reform of the tax system:
o Raising the level at which businesses have to register for VAT
o Standardising personal allowances for all forms of NI and income tax
o Improving tax guidance for start-up businesses and new employers

• Cancellation of the planned one per cent rise in corporation tax in 2011

John Wright, National Chairman of the Federation of Small Businesses, said:

“When VAT was lowered in December 2008 many rates stayed the same and some were reduced by up to 2.5 per cent. What has become apparent is that after VAT was put back to 17.5 per cent in January this year, nearly half of the flat rate schemes have seen the VAT level rise above the pre-decrease level. 

“While a few sectors have seen a decrease, the majority of businesses will see their rates rise, which is unacceptable at a time when cash-flow is limited. The FSB believes that this is a stealth tax, which will affect a firms overall profitability, deliberately directed at small businesses during the recession. The FSB believes there needs to be more openness in how these rates are calculated and when they rise.

“The Budget is the Governments chance to put flat rates back to 2008-levels and remove the additional tax burden imposed on small businesses.”

FSB News Release
PR 2010 09

Issue Date: Monday 1 March 2010

Small businesses fail to grow because of complex tax rules

FSB and ICM survey shows that three quarters of businesses would grow their business if the tax regime was easier to understand

Research carried out by the FSB and ICM of over 1,600 small businesses showed that 75 per cent of small businesses believe that they would be able to grow their business if the UK tax system was simplified. 

Over a third (34%) of businesses surveyed said they found income tax the most difficult issue to deal with, while 52 per cent citied taxable allowances – the amount a person is taxed on – hardest to get to grips with. Over half (52%) said VAT is the easiest type of taxation to understand.

Many businesses do not feel confident dealing with tax issues, with 66 per cent employing professional help. Half of businesses spend less than two hours per week on fulfilling their tax responsibilities, but for one in 10 it takes up more than six hours of their time.

John Wright, National Chairman of the Federation of Small Businesses said: “The Government must recognise how important small businesses are to strengthening economic recovery. As our survey findings show, three in four would grow their business if the tax system was more simple to understand. The potential investment and jobs which could be created through such a move would provide the economy with the boost it needs to sustain recovery.

“As we head towards a General Election the message from small businesses is clear: the incoming Government must think small first and get conditions right for entrepreneurs and small businesses to thrive.”

FSB News Release

PR 2010 10

Issue date: Monday 01 March 2010

Business organisations urge small firms to say no to the National Insurance rise

The Federation of Small Businesses (FSB) has joined forces with other business and employment organisations to call on small firms to sign a petition urging the Government to freeze National Insurance.

Research by the FSB with the Centre for Economics and Business Research (CEBR) found that increasing employers’ National Insurance by one per cent will cost 57,000 jobs at a time of record unemployment figures, but will not give any substantial help to plug the Government’s gap in public finances.

The FSB wants to see businesses using the petition to persuade the Government to reverse the planned one per cent rise in National Insurance and put a halt on any future rises in the foreseeable future. Raising taxes on small businesses must be a last resort if they are to do their job of helping to put the country on a steady road to recovery.

John Wright, National Chairman, Federation of Small Businesses, said:

“This petition – calling for no rise in National Insurance Contributions – will tell Government that real action needs to be taken to really help tackle unemployment. The rise in National Insurance is a tax on jobs and will cost the country in thousands of jobs, as well as prevent small firms from taking on more members of staff at this crucial time in the country’s economic recovery.

“The FSB has been calling on the Government to take steps to make it easier for the country’s 4.8 million small firms to employ staff. The FSB knows that small firms want to recruit over the coming year, but are put off by taxes. The Government can give the economy a real helping hand by freezing National Insurance and helping to encourage small firms to grow and take on additional employees.”