FSB calls for no tax increases

The FSB, Federation of Small Businesses, has petitioned the Chancellor not to hike taxes in their latest pre-budget report, amidst fears that higher taxes may lead to a greater rate of unemployment.

In the submission, the FSB points to a report performed by the Centre for Economics and Business Research (CEBR) that shows that raising taxes costs UK businesses billions of pounds, which in turn leads to businesses being forced to cut hundreds of thousands of jobs.

The hypothetical report by the CEBR shows that a simple 1p increase in employer national insurance can result in massive job losses without actually helping out public finances in a significant manner.

Additionally, the FSB is asking that corporation taxes be reduced so that small businesses are rewarded with incentives if they hire more staff.

According to the CEBR report, if the Government were to raise corporate taxes on small businesses from 21% to 26%, 100,000 jobs would be lost from SME’s, reducing the economic output of these businesses by £4.3 billion, which in turn would only help reduce the deficit of the public sector by around £1.6b over a period of ten years.

Additionally, the FSB would like to see the VAT rise delayed as well.