SMALL FIRMS across Northamptonshire have issued their message loud and clear to Chancellor of the Exchequer Jeremy Hunt as he puts the finishing touches to his Spring Budget statement due on Wednesday (March 6).
They want to see measures to help their cashflow, to protect jobs and measures that encourage and facilitate growth.
“Next week, the Chancellor must show the country he can take practical and credible steps to improve the environment for everyone who runs, works in or uses small firms across the UK,” said Sally Wood, area leader for the Federation of Small Businesses in Leicestershire, Northamptonshire and Rutland.
“We know that in times of recession, the more money small firms have to work with, the more chance the economy has of not only recovering but recovering quickly.
“This Budget needs to be about cutting the taxes that hold small firms back the most, which in turn will incentivise growth and job creation. As we steer away from the recession, it is the only way for us to revive our sluggish economy.”
FSB research shows that small firms have been struggling for longer than the current economic difficulties. Confidence among small businesses has dipped below zero for seven consecutive quarters, hit hard by rising energy costs and the cost of doing business.
“Cutting the tax on jobs by raising the Employment Allowance from £5,000 to £6,500 to align it with the increase in the National Living Wage, would be a smart move,” said Ms Wood. “Small firms are having to wrestle with decisions about the future of their teams, and we need to make it easier for them to focus on growth.”
The FSB is also calling for an increase in the current £85,000 VAT threshold – the revenue figure at which businesses must register to pay the tax – to £100,000.
Ms Wood said: “The £85,000 VAT threshold acts as a straitjacket to firms eager to expand because they end up tiptoeing around it to avoid extra costs. Raising it to £100,000 could pull many away from that edge.”
The FSB also wants to see tax-free shopping to encourage tourists to spend more in shops and restaurants. ”This not only strengthens the supply chain, it also leads to increased revenue for the Treasury,” Ms Wood said.
Small businesses devote 52 hours each year to tax compliance, coupled with £4,100 on expenses like software or accountants. Ms Wood said: “These deplete resources and stifle productivity so we would like to see HMRC set a target to reduce business compliance costs.”
Small firms in Northamptonshire also want a new look at access to finance and the Recovery Loan Scheme expanded, with banks protected from incoming impacts that would harm their ability to lend to small firms.
Ms Wood said: “Entrepreneurs need to be incentivised to grow their businesses and so the self-employed need to be given the same consideration when it comes to personal tax cuts.
“Time is of the essence here and the Chancellor should not pass up on the chance to bring in policies to improve cashflow. Any incentive to grow in these trying times should be at the forefront of priorities.
“It is time to leave this period of economic downturn behind us.”