NI system must change, say small firms

Owners of small firms have renewed their call for a change to the National Insurance system, claiming tax legislation has prevented them from taking on more staff at a time when around 2.5 million people are unemployed.

According to the newly published results of a survey by the Federation of Small Businesses (FSB) trade body, more than half (58%) of independent ventures believe taxes have a negative impact on their growth, with greatest dissatisfaction in the south-east where 64% of respondents object to the UK’s current approach to taxation.

In response to the concern, the FSB, which represents more than 213,000 members, has stepped up its demands that the Government freeze National Insurance contributions and provide an NI rebate for small firms with fewer than 50 staff that take on more workers during 2010/11.

Last October, a report by the Centre for Economics and Business Research thinktank, on behalf of the FSB, suggested that an increase to the burden of taxation on the country's small businesses would plunge the economy further into debt.

The document, which was released in anticipation of the pre-Budget report, calculated that a 1p increase in employers NICs would cost the economy 57,000 jobs but only make a small dent in the gap in the public finances.

Categories: News , Income Tax