Small businesses are being asked to carry the heavy weight of new tax changes on their shoulders, and after today’s announcement they haven’t seen anything to be excited by.
The Chancellor called on ‘businesses to contribute more’ which is both disappointing and an unusual approach, especially for small businesses already facing the impact of outdated tax policies.
Increasing employers’ National Insurance has been positioned as a measure that won’t impact working people, but for the hundreds of thousands of business owners, it will likely have a detrimental impact. Even with the increased employment allowance, it doesn’t help those founders who are looking to grow and scale their business.
The extension of the Enterprise Investment Scheme (EIS) is a great thing for growth in early-stage businesses, but this will not be enough reassurance for start-ups that Labour will create an environment for them to thrive.
Business rates were long due an overhaul and it is a failure of this budget to not provide the expected business rates system review whilst the business relief is slashed from 75% to 40%.
For 20 years, start-ups and businesses within the hospitality industry have shouldered the brunt of the current system, and it seems the new approach will leave this sector still wishing for fairer business rates. Simplifying the tax code for small businesses, as well as offering targeted reliefs for early-stage companies – and those investing in them – would go a long way to better support UK entrepreneurs.