Budget missing assistance on job creation for small firms, says FSB
The Federation of Small businesses welcomed the furlough extension included in the budget as “much-needed”, but also noted there was very little on job creation and reducing the cost of employment for small firms.
In response to Chancellor Rishi Sunak’s Budget Speech in the House of Commons, FSB national chairman Mike Cherry said the budget will help many small firms with their final push through to September.
However, he also said there is little here to aid job creation or help people return to work.
“Ensuring the newly self-employed can now access support marks a big step forward – we’re pleased our campaign has been heard – but directors, who appear to have been left out yet again, will be incredibly disappointed,” Mr Cherry said.
“Thousands of small businesses are on the brink of collapse and thousands more are suffering from low confidence as cash reserves dwindle.
“They will welcome both the extension of flagship support schemes that have kept them going over the hardest year they have ever faced, as well as confirmation of new support measures around taxation, employment and cash grants.”
Mr Cherry said the continuation of business rates and VAT discounts is critical, and it’s important that those in supply chains benefit from them, not just those that neatly fit the definitions of frontline retail, leisure and hospitality.
Further, he also noted the new super deduction option sounds very promising, and looked forward to further detail on the investments it will cover and should be made accessible to the smallest firms.
“Confirmation of pre-announced measures like Help To Grow on management and digital skills, and Restart cash grants, are welcome, and it’s key that the very smallest firms benefit from them,” Mr Cherry said.
“That said, while the furlough extension is much-needed, small employers are still struggling due to high national insurance contributions and the removal of the job retention bonus.
“The government should look again at these areas. Fundamentally, there was very little in the statement on job creation and reducing the cost of employment.”
Further, Mr Cherry said the Chancellor’s commitment to ruling out tax rises until the recovery is underway is the right one.
“Hikes on those who can bear it the least, with modest profits and large amounts of debt, are self-defeating,” he said.
“The reintroduction of a small business corporation tax rate with a taper is good to see. The taper must be at a reasonable level, especially as directors of small companies have not received a penny in income support.
“It’s important that adjustments to a tax regime that already weighs substantially on the smallest firms are informed by small business expertise. A lot will hinge on the tax announcements due later in March, and the much-needed, delayed downward review of business rates.”