FSB calls for 'pro-business Budget'

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Chancellor of the Exchequer Philip Hammond has been urged to present a "pro-business Budget" on March 8th.

According to the Federation of Small Businesses (FSB), confidence among small and medium-sized enterprises (SMEs) has "rebounded" in the last few months.

However, the organisation is concerned that their growth prospects are waning, as they face challenges such as an increase in the National Living Wage, greater National Insurance contributions and a rise in pensions auto-enrolment.

The FSB described this as a "triple hit" that has left many SMEs wondering how they are going to meet these extra costs. This, it warned, could put some companies off creating new jobs altogether.

As a result, the FSB believes the chancellor should use his upcoming Budget as an opportunity to show support for British businesses to improve job creation and productivity across the UK.

Mike Cherry, national chairman of the body, commented: "Spring Budget 2017 is a critical moment for the government to show it is unashamedly pro-business, and that the chancellor recognises that small businesses are the engines of job creation. 

"Spiralling labour costs are now threatening their growth ambitions and hiring intentions. The Employment Allowance, created under the previous administration, has been a huge success and now it is time for this government to build on that, and help us to create the new jobs and growth that this country needs.”

The FSB went on to highlight the government's plans to digitise the tax system as a particular area of concern for SMEs at the moment.

Indeed, it noted that small firms had been expecting confirmation and details on how to comply with ministers' digitisation proposals at the beginning of this year.

However, the FSB said information on the exemption threshold and the implementation timetable have both been delayed by HM Revenue and Customs.

Mr Cherry warned that this is creating additional uncertainty for SME owners, as they have "no idea how they will meet their tax obligations next year".

"Spring Budget 2017 is the moment for the chancellor to announce that the scheme will be implemented in 2020, after thorough piloting, user-testing, communication and help for those who will fall foul of any new obligations," he said.

"There should also be an increase in the turnover threshold to £83,000 to match the VAT threshold, which removes those businesses that will struggle the most."

Mr Cherry added that focused help and support needs to be made available to those who are "digitally excluded" and therefore unable to comply with new tax requirements.
"Rushing in this change just as businesses face Brexit is a headache that small business owners just don’t need," he said.

The FSB warned just before Christmas that inadequate broadband coverage and slow speeds are causing problems for many small businesses across the UK, in particular those in rural areas.

Ministers were urged to "step up and deliver" a Universal Service Obligation (USO) to ensure a basic level of broadband can be accessed by all small businesses by the end of this parliament.

The latest figures from Ofcom indicate that 480,000 small businesses are currently unable to access superfast broadband.

Statistics also show that 192,000 cannot even access speeds of 10Mbps - the speed specified in the government's planned USO.