FSB: Tax hikes risk severing Conservatives’ ties to business – CityAM : CityAM
The Conservative Party’s ties to British businesses are at risk of being severed by looming tax hikes.
The lobby group for British small businesses has slammed the Tories’ plans to raise national insurance at a time when firms across the country are grappling with higher costs and shortages.
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Mike Cherry, national chair of the Federation of Small Businesses (FSB), said: “The Conservative Party risks losing the trust of small firms which are bracing for a rise in the jobs tax at the same time as having to deal with haywire input cost rises across the board.”
“Combined, these developments will make it hard for businesses to take on or retain employees, while cutting into the margins that would otherwise be used to invest, stunting their potential growth.”
The government recently announced a 1.25 percentage point hike to national insurance and dividend taxes in a bid to raise funds to tackle the social care crisis.
UK businesses are struggling to stay profitable amid higher staffing and raw materials costs sparked by worker and energy shortages.
The criticism comes as the Conservative party conference in Manchester gets under way this weekend.
The FSB called on chancellor Rishi Sunak to increase the small employment allowance and expand the small business rates relief at the budget on October 27.
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Figures from the Office for National Statistics (ONS) published yesterday shows UK borrowing pulled back in the second quarter of this year due to tax receipts holding up well, suggesting Sunak has fiscal wriggle room at the budget.
“The Conservative conference and the budget must see the party step up to the plate, rediscover its entrepreneurial zeal, and offer more than tax grabs to fund growing public sector spend,” Cherry added.