CHANCELLOR TOLD TO THINK SMALL; Budget focus must be on small business, says city FSB chairman.
decision firms' average in administration BUSINESS leaders in Coventry and Warwickshire have written to the Chancellor ahead of the emergency Budget next week to urge the coalition government to 'think small first'.
The Federation of Small Businesses have branded next week's important event as 'an emergency Budget for emergency times' and believe that difficult decisions need to be made to tackle the debt.
But they have urged the Chancellor George Osborne to temper this with measures which will inspire confidence in the future and allow businesses to innovate, grow and employ. There is a distinct possibility that VAT will be increased and the FSB is asking the government to recognise that a decision on timing is vital for small firms' cash-flow. The move to reduce VAT to 15 per cent in 2008 cost the average small business pounds 1,500 in administration alone.
Bruce Undy, Warwickshire and Coventry chairman of the FSB, said: "While the FSB does not want to see taxes increased we understand that reducing the budget deficit is a key priority.
"The Chancellor must use the Budget to set out his pro-business credentials and offer something to stimulate growth. Private sector growth is the best method of cutting the deficit, keeping taxes low and absorbing the staff that will lose jobs in this round of budget cuts."
The FSB also opposes any major increase in the Capital Gains Tax for business and entrepreneurs as it would stifle long-term investment in small firms.
Business leaders believe that CGT on business activity should remain at 18 per cent and a generous taper relief be reintroduced to help savers and long-term investors.
Mr Undy added: "It is imperative that any changes to Capital Gains Tax or VAT go hand-in-hand with an ambitious plan for helping economic growth through allowing small firms to employ, grow, invest and innovate." According to the FSB, a fifth of small firms believe that National Insurance Contribitions and PAYE taxes are the biggest obstacle to growth.
They have argued that while it is important that the government cuts the deficit it must not be at the expense of the recovery or mean a hike in taxes for small businesses.
Mr Undy said: "Proposals to give new firms a National Insurance holiday do not go far enough and will not help those businesses who have been running for a couple of years and want to expand by taking on staff.
"We look forward to the Budget on June 22 and hope that the Chancellor uses this opportunity to 'think small first'."
ENCOURAGE BUSINESS: Coventry FSB chairman Bruce Undy, left, wants George Osborne to put business needs first
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|Publication:||Coventry Evening Telegraph (England)|
|Date:||Jun 17, 2010|
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