Predictions suggest that the Budget will see a rise in both employer’s national insurance payments and the rates of capital gains tax on shares.
We can’t afford a ‘painful’ budget for SMEs, or we’ll see the taps turned off on their growth ambitions.
SMEs make up 92% of British businesses and form the beating heart of the economy – when they thrive, the whole economy reaps the rewards, but sluggish SMEs lead to a stagnant economy.
Although the Government faces the challenging prospect of a fiscal ‘blackhole’, it shouldn’t come at the expense of SMEs’ ambition.
Amid speculation concerning tax rises, SMEs are undoubtedly eager to understand the detail. An increase in employer national insurance payments would be anti-growth, impacting cashflow, profit margins and investment levels, as well as hampering job creation. Meanwhile, a rise in capital gains tax risks discouraging the entrepreneurial spirit the UK economy desperately needs.
With inflation finally dropping to 1.7%, the Government should seize the opportunity to encourage business investment from companies of every size and support expansion across the whole economy. Above all, they must not increase the tax burden on the SME community.
Quite the opposite – according to our SME Confidence Tracker, 87% of SMEs call for better tax incentives to help boost growth.* More than ever, SMEs need the backing of the budget to thrive in today’s economy.
