Rachel Reeves warned against piling on small business tax pain
As Rachel Reeves circles new avenues to boost tax receipts, the Chancellor has faced a fresh warning to ease the pain for small businesses.
Businesses have called for Reeves to reverse her Autumn Budget tax hikes and ease the burden for firms as they suffer the crunch of economic uncertainty.
One in five small- and medium-sized enterprises (SMEs) expect to be forced out of business if conditions don’t improve, research from Simply Business found.
Julie Fisher, UK chief executive of Simply Business, told City PM: “Suggestions of further increases come at a time when small business confidence is at a low point.”
Over 50 per cent of firms have said they expect the economy to worsen, which is double the amount in 2023.
Fisher said: “With the economic challenges facing the UK, all signs point to a challenging Autumn Budget ahead.”
SMEs suffering under Labour policy
Deputy Prime Minister Angela Rayner’s overhaul on employment law piled on another headache for small businesses, with estimates it will cost firms billions.
The Federation of Small Business (FSB) revealed earlier this year firms were set to put pause on hiring and slash jobs over fears about the future of the UK workforce under the new reforms.
Sir Keir Starmer’s second-in-command laid out the legislation in October with 28 individual measures in the Bill, including ending exploitative zero-hour contracts and banning fire and rehire tactics.
But Fisher said there is a “clear” message from the SME community, offering “practical lifelines that could give businesses the breathing room they need”.
Fisher listed a simplified tax process and reversal of employers’ national insurance increases as key points to improve confidence among firms.
“Providing over £2.8 trillion in annual turnover, and accounting for over half of all employment in the private sector, small businesses are critical to our economic prosperity. Create the conditions for them to thrive and we will all feel the benefit,” she added.