Leaders' blast in tax storm.
TEES small business leaders have slammed the current taxation system as "damaging and uncompetitive", as the escalating row over the abolition of the 10p income tax rate heaped further pressure on Gordon Brown today.
The Prime Minister is facing more back-bench rebellion over the decision - which has left many low income earners worse off.
Local firms, who say it is damaging their relationship with employees, are seething over an extra burden on top of recent hikes in corporation tax and capital gains.
John Pettifer, managing director of IT equipment recycling firm, Recycling IT, believes the move could make it harder to attract and retain skilled workers.
He said: "Some of my staff are worse off by about pounds 6 per week. That might not sound much but it's an extra take-away each week.
"There's not a lot I can do and the additional problems of corporation tax and business rates has contributed to an uncompetitive trading environment."
Mr Pettifer said his business rates had increased from pounds 2,000 last year to pounds 9,000 in 2008-2009. "We don't qualify for small business rate relief because we need a relatively large floor space to run our business," he said.
David Forefit, director of Forefit Structural Glass Solutions in Nunthorpe, said the current system was "unfair".
"The inequality means that smaller businesses are getting hammered," he said.
In recent months the government has hit small businesses with a triple tax whammy. In addition to the income tax, corporation tax has risen from 19% to 21% in the last 12 months, rising to 22% in April 2009. Meanwhile, capital gains tax taper relief has also been scrapped.
John Wright, Tees Valley-based chairman of the Federation of Small Businesses (FSB), said the government was sending out "all the wrong signals" and called for a reduction in corporation tax to appease smaller firms.