Many small businesses in the U.K. are struggling to stay afloat, and hiring new employees has often been out of the question. The government’s temporary break on National Insurance will help, but not enough, according to the Forum of Private Businesses. Phil Orford, the Forum’s chief executive, said that if the country’s small businesses are meant to grow and prosper in support of economic recovery, more changes are desperately needed.
In a recent survey carried out by FPB, a not-for-profit organization, more than two-thirds of business owners polled said they think the tax structure is unfair and unwieldy. About one in five said that they would be willing to pay more tax if the system were to be simplified; as it stands the U.K.’s tax system is one of the most complicated in the world.
More than three-quarters of those polled said that the headache of payroll taxes tends to deter hiring new employees.
SME’s also said that the loopholes employed by big businesses with armies of tax consultants should be closed, as they can’t compete in that area. About half said that the VAT increase would have a negative effect on their businesses, and about 10% said the increase would give competitors an unfair advantage.
Last summer the government created a new Treasury department called the Office for Tax Simplification, which is presently working on the complexity problem, hopefully to do some restructuring that will help smooth the way for small business growth. The FPB reported that a majority of small business owners feel that the current tax structure and its inequities and complexities are the biggest problem they face. Orford said that losing some of the existing red tape and lightening some of the tax burden for small business should be the Treasury Department’s priority.