ESB Accountancy asks for easier bookkeeping in this week’s Spending Review and Autumn Statement.
ESB Accountancy sees the heavy duties facing businesses and want the Spending Review and Autumn Statement to help alleviate some of the pressures that the Government is placing on small and medium sized businesses.
ESB Accountancy calls on the Chancellor to consider four crucial areas:
• addressing tax imbalances and rate relief for small businesses;
• supporting regional growth;
• investing for the long-term in areas that will boost productivity; and
• lowering costs for taxpayers and business.
Addressing tax imbalances and business rate relief for small businesses
Recently announced and unexpected changes to dividend taxation are likely to result in many of our members on modest incomes seeing a sharp rise in their tax liabilities. We call on the Government to take steps to ensure that this change does not disproportionately discourage business owners from investing in their business and staff.
We are also concerned about the impending expiry of both retail relief and the temporary doubling of small business rate relief (SBBR) at the end of March 2016. Business rates have a significant impact on small firms and the expiry of these reliefs, on top of the adjustment for the National Living Wage and automatic enrolment into pensions, would considerably increase the cost burdens facing our members. We therefore ask Government to extend rate relief to support the small business community.
Supporting regional growth
As the recovery gathers pace, it is vital that geographic imbalances in the UK’s economic performance are addressed to put the economy on a stable footing for the future.
Development of infrastructure – such as transport and digital services – will be key to generating regional growth. Road, rail and air transport all need long-term investment. For example, the Government must invest in finding a permanent solution to the travel chaos caused by Operation Stack on the M20.
As recent experience shows, this impacts heavily on exporters across the UK. Now that the Airports Commission has recommended expansion at Heathrow, Ministers must also make a swift decision on additional runway capacity in the South East.
We are supportive of devolving more powers to local areas in England, but calls on the Government to ensure there is fair allocation of resources to the regions, no barriers to investment and trade between areas – and crucially – to allow the voice of small businesses to be heard at a local level.
Investing for the long term to boost productivity
Addressing the UK’s weak underlying productivity performance is critical for the health of the economy. Small businesses should be central to these efforts, given that they account for 48 per cent of private sector employment.
Key areas to focus on should be investing in skills, science and innovation, including commercialising ideas from universities. Tax also plays an important part in driving growth, and we are hugely supportive of tax relief schemes which encourage investment in ambitious start-ups. To provide stability for firms and investors alike, these schemes should be maintained and refined where appropriate.
Finding ways to increase exports should remain a central policy priority. This has been a long-standing challenge for the UK economy. We have therefore called on the Government to look at ways to encourage a wider number of firms, and in particular new businesses, to think about exporting when they start up. As well as backing the British Business Bank, the Government should consider what role it might play in that export effort.
Lowering costs for taxpayers and businesses
Small businesses have a key role to play in increasing efficiency for the taxpayer by providing innovative ways of delivering public services.
We welcome the Government’s target to raise small firms’ share of central government procurement to a third, but call for robust monitoring and clear accountability in meeting these targets.
The National Living Wage should also be observed closely, as there is a risk that small suppliers – in sectors such as social care and cleaning – may be priced out of contracts.
With deep cuts expected across departments, we are calling on the Chancellor to provide sufficient funding where economic returns are highest – by investing in infrastructure, flood defence, science and regional growth.