Chancellor must improve access to finance, simplify the tax system and make business rates relief permanent says the Federsation of Small Businesses (FSB).
The FSB wants a Budget for small firms, which will give opportunities for investment, growth and job creation and return confidence to small businesses.
The FSB has called for incentives to take on new staff and for the Chancellor to announce a review of how enterprise support is delivered through central and local government to ensure support is focused and effective.
Small firms have ambition and want to grow but consistently cite finance and access to long term capital as key barriers. The Chancellor needs to put clear plans in place for the Business Bank.
Not only should he set out the role the new institution will have in getting this finance to small firms, he should also show how the bank should help open up competition in the banking sector and encourage non-bank sources of finance.
To bolster efforts to increase competition, the FSB is urging the Government to ensure the Financial Conduct Authority focuses on this aspect of their remit with the aim of encouraging new entrants into the market, so that small firms have more choice.
The Chancellor must also ensure that the work being done to simplify the tax system is not watered down. The current proposal to allow small firms with a turnover of less than £77,000 to provide cash-based accounts is a major deregulatory step and one the FSB believes will increase compliance.
The FSB would also like to see existing schemes for investment relief pooled together in a simple one-stop-shop so that small firms know where to go for capital to invest in their business.
Small Business Rates Relief should also be made permanent in England as some small businesses pay more in business rates than they do in rent. The FSB is also calling for a review on how business rates are calculated, moving the indexation from RPI to CPI in line with other areas of Government policy.
In addition, to help create new jobs and boost small firms’ confidence the FSB is recommending that the Government does the following:
- Extend the National Insurance Contributions holiday to all small firms across the UK with less than four staff, rather than just start-up businesses. This could create 45,000 new jobs and add £1.3 billion to the economy
- Cancel the 3p fuel duty rise planned for September 2013 and to initiate a full review of fuel prices and motoring taxation
- Help boost businesses cash-flow, by ensuring that when it is awarding contracts that its Tier 1 suppliers are signed up to the Prompt Payment Code and pay their supply chains quickly
- Extend the money available through StartUp Loans scheme to help more people that struggle to access finance to start a business. The payback periods should also be extended
- Direct Ofgem to mandate that energy companies cannot rollover a small business onto an un-negotiated contract for more than 30 days, down from the current period of 12 month
John Walker, National Chairman, Federation of Small Businesses, said:
“With the economy only growing a fraction in 2012, the Chancellor must deliver a Budget that is unashamedly focused on boosting small business. Our figures show that confidence is rising among small business owners, but there is still caution. And, even though unemployment has fallen considerably, consumer confidence to spend and boost the economy is far from sufficient.
“What we need to hear on 20 March is not more small-scale policies which tinker at the edges but measures that will have a tangible effect both immediately and in the long-term. That is why we have asked for a review of enterprise policy, to ensure the right initiatives are in place that really do help small firms start-up and grow.
The Business Bank and access to finance have a clear role to play in this, but so too does making it easier to run a business. This is why making it easier to find investment relief, simplifying the tax system and making small business rates relief permanent should be the Chancellor’s priority.”