Chancellor urged to use Spring Statement to protect small businesses

Chancellor urged to use Spring Statement to protect small businesses
Newly appointed FSB National Chair Martin McTague is urging the Chancellor to make his Spring Statement on 23 March “a rallying point” for businesses as surging operating costs, supply chain disruption and labour shortages make it increasingly difficult for firms to invest and expand.
In a letter to Rishi Sunak, McTague recommends interventions aimed at addressing “foundational issues” in the UK economy against a backdrop of declining business confidence.
The move follows a pledge from the Chancellor in February to create “a new culture of enterprise”. Sunak stated that he “firmly believe[s] in lower taxes”, adding that “the marginal pound our country produces is far better spent by individuals and businesses than government”.
He is set to confirm an £18bn collective annual increase in national insurance contributions (NICs) and dividend taxation at his Spring Statement next week. There is also speculation that the Treasury may scrap the R&D tax credit incentive for small research-intensive businesses in favour of supporting larger companies.
McTague said that, with the public finances tight, the Treasury should move away from an “eye-wateringly expensive” super deduction tax break which “will primarily be used by corporations and multinationals, not small businesses operating in all our communities”, and instead prioritise reduction of Government-imposed overheads to free up funds for investment at the local level.
FSB research shows that just 4% of the small businesses that make up 99% of the private sector see the super deduction as one of the top three incentives to invest.
In its costed Spring Statement submission, FSB recommends:
• Increasing the Employment Allowance to £5,000.
• Taking an additional 200,000 community small businesses in levelling up target areas out of the business rates system by increasing the rateable value ceiling for small business rates relief to £25,000, and extending a one-year relief on business rates increases linked to property investments in plant and machinery.
• Extending support with energy costs being allocated via the council tax system to micro businesses via the business rates system, and launching a Help To Green initiative to spur on-site renewable generation.
• Delivering on pledges to end the UK’s poor payment culture by making Audit Committees directly responsible for ensuring best practice within supply chains.
• Expanding and making permanent a statutory sick pay rebate for small firms whilst continuing with incentives in England to take on apprentices and T Level placements.
• Widening eligibility for the Help To Grow Digital and Management initiatives to the 750,000 small firms currently excluded from them.
• Simplifying the R&D tax credit system to make it more accessible for small businesses without having to use paid intermediaries.
The FSB’s letter follows publication of the ONS’s latest Business Insights study, which finds that 5% of business owners “have low or no confidence of surviving the next three months”. The latest BEIS statistics show that there are 5.6 million firms across the UK, indicating 280,000 are at imminent risk of collapse.