Chancellor right to focus on the fundamentals says FSB

TAX simplification measures, a commitment to raise the investment allowance and a vital review of business rates, will help small businesses, according to the Thames Valley regional Chairman of the Federation of Small Businesses (FSB).

Reacting to the Budget announcement this afternoon, the Federation of Small Businesses (FSB) has welcomed measures that it believes should support: “…already robust confidence” among its members. David Hawes, Thames Valley regional Chairman, Federation of Small Businesses, said:

“Our members will be encouraged by many of today’s announcements. The review into business rates is long overdue. When complete, it must deliver tangible benefits to businesses and not end up as just another report that sits on the shelf.  His (the Chancellor’s) commitment to raise the Annual Investment Allowance to an appropriate level will provide the certainty needed for businesses to plan and invest – something badly needed if the UK is to raise its productivity.

“We are especially pleased that the idea for a single digital tax account is being taken forward. This is something we have long advocated – featuring prominently in our 2015 Business Manifesto. Implemented properly, this should reduce the time businesses take to complete their tax returns, and offers opportunities to deliver targeted support. The abolition of Class Two National Insurance contributions for the self employed is also a welcome step.

“There were some helpful measures to help with getting connected. The extension of the superfast connection vouchers will help small businesses in more urban areas. We look forward to reviewing the details of the new digital communications infrastructure strategy. Access to superfast services is a key requirement for small businesses. Delivery of this strategy will be critical to future-proofing the national economy.”

Commenting on specific areas detailed in the Budget, David Hawes continued:

Tax simplification

“Collecting and calculating all of the varied and confusing taxes that apply to small firms is a huge administrative burden. The new single tax accounts called for by the FSB should make a big difference, helping firms to manage their tax on a monthly basis much like utility payments. This will streamline collection and greatly improve cash flow control for small businesses. To help incentivise firms to move to the new system, we have suggested that HMT could offer interest on the money they hold.

“While we wait to see the details, the decision to abolish class 2 NICS for the self-employed is in principle a welcome step towards simplification and should boost take home pay for the self-employed on the lowest incomes.”

Investment

“We have been clear that the Annual Investment Allowance needs to be set permanently at a generous level to give investors certainty and stability. The Chancellor has made a clear commitment to a keeping the allowance at a high level. We now hold the next Government to making this move permanent.”

Business Rates

“The case for overhauling business rates is overwhelming and it’s good to see the Government recognise this.  Small businesses would like to see the ambitious review deliver tangible reform, not just empty words.

“Business rates are the highest costs most small businesses face after rent and staff wages, and they place an excessive burden on small businesses. The Government is rightly supporting businesses with small business rates relief and transitional rates relief. This support must continue until a new system is in place in the next Parliament.

“We also welcome the opportunity for local authorities to benefit from the growth and success of local businesses by retaining additional business rates revenue raised locally. This should encourage local authorities to take steps to support their local businesses to grow and prosper.”

Broadband

“Digital connectivity is critical for small businesses. The announcement of a target download speed of 100 Mbps matches our recommendations. Of equal importance is the increase of the Universal Service Obligation to 5 Mbps which is an important first step to help rural businesses access the minimum standards of digital services they so urgently require.

“We called for the Government to recognise the value that LEPs can contribute to ensuring small businesses receive the digital services they require. We look forward to working with all levels of Government to ensure that this ambitious and much needed strategy is delivered.”

The northern powerhouse

“Improving connectivity across our northern cities is a major issue for our membership. We are fully supportive of improved East to West connectivity, but as always what is needed is delivery for these infrastructure projects. The publication of the Transport Strategy for the North will provide more details about how regional connectivity can be improved.

“Strong road and rail infrastructure are necessary for regions outside of London and the South East to access markets and make the most of growth opportunities. Small businesses are disproportionately reliant on our road network so continued investment in keeping the different parts of the UK connected is essential.”

Tech Clusters

“Support for emerging clusters is welcome, as they are crucial in driving growth. The investment in specialised tech hubs in Manchester, Leeds and Sheffield will help support growing, innovative industries and to rebalance the economy.”

Fuel duty

“Continuing to freeze fuel duty will be welcomed by small firms still struggling with the cost of fuel at the pump.”

Beer and cider duty

“The cut to the price of a pint will help publicans across the country. We look forward to this cut being followed by reforms to the tie which will lead to a more competitive market. The freedom to stock a wider range of beers will provide a boost to local economies while giving consumers greater choice.”

R&D Tax Credits

“R&D Tax Credits are an important way of incentivising business R&D investment, but as we have consistently argued, many smaller businesses simply find them too difficult to claim. The announcement of well-publicised, stand-alone guidance, backed by advance assurance of claims which we have strongly advocated, should make it much easier for small businesses to apply and drive further investment by innovative companies.”

Swansea bay Tidal Lagoon

“We support the plans for the Swansea Bay Tidal Lagoon as we believe it will bring significant economic benefits. We have met with the company behind the proposed scheme and underlined the importance of local supply chains to the project, providing opportunities for skilled jobs and business growth.”

SOURCE: FSB Thames Valley Press Release