Responding to the Spring Statement by the Chancellor Philip Hammond, Federation of Small Businesses (FSB) National Chairman Mike Cherry, said: “The Chancellor has sent a clear message to UK boardrooms today by committing to ending the late payment crisis that destroys 50,000 businesses a year.
"We look forward to working with the Chancellor and his team to eliminate the scourge of late payments. Ending the late payment crisis could add £2.5 billion to our economy annually and help close the productivity gap.
“Eight in ten small firms suffer from late payments. The collapse of Carillion highlighted the dangers of the UK’s pernicious poor payment culture. We need to create an environment where another Carillion can’t happen.
“VAT is the most time-consuming tax for small firms to handle. A small VAT-registered firm spends more than a working week a year complying with the tax on average. That’s time that should be spent running their firms and increasing productivity.
“Suddenly dragging more small firms into the VAT regime is not the answer to the ‘thresholditis’ issue – where businesses close to the £85,000 turnover threshold for registration put the brakes on expansion. It’s good to see that the Chancellor’s two-year freeze on the VAT registration threshold is still in place. We welcome the fact that the VAT review launched today considers pro-business solutions to the challenge of small firms bunching before the threshold, such as phasing-in VAT obligations for small firms as they start to bring in more than £85,000.
“It’s good to see the Chancellor outline plans to tackle online VAT evasion. No business, in any part of the world, should be gaining an unfair advantage by dodging tax. We need to level the playing field for small UK firms trading online that meet their tax obligations. Any new tax on multi-national digital corporations can’t be allowed to impact on small firms who are already trying to compete in a sector dominated by big players.
“FSB has long called for more frequent business rates revaluations. By delivering on their promise to make these a reality, the Government could make the rates regime fairer, aligning business rates bills with current property values and the local economy. However, it’s absolutely crucial that more frequent business rates revaluations aren’t used as an excuse to increase tax revenue or place additional admin burdens on small firms.
“The tax take from business rates is set to rise to £25 billion over the coming financial year. Meanwhile, small firms are still waiting on support from the ‘emergency’ £300 million business rates hardship fund launched last spring. It’s critical that this funding is not lost once we reach April. Equally, we need to see small businesses hit by the unfair Staircase Tax refunded swiftly. We expect a Government Bill that makes this happen to be introduced in Parliament within weeks rather than months.
“The Chancellor’s review of access to cash in the UK needs to start with addressing the damage that LINK’s proposed cut in ATM funding from July is set to have on local high streets. We want to see the Payment Systems Regular pause plans to allow for a proper market review and open consultation on LINK’s proposals.
“It’s good to see £80 million of much-needed dedicated funding for small firms who are keen to take on an apprentice. Small businesses are key to delivering the Government’s target of 3 million new apprenticeships by 2020. Also welcome is the Government’s consultation on tax reliefs to encourage more training opportunities for the 4.8 million-strong self-employed community.
“The Chancellor has shown he’s on the side of the UK’s 5.7 million small business owners and self-employed entrepreneurs. We look forward to his kind words being followed up by real action.
“It’s good to see a renewed focus on productivity from the Chancellor – increasing it will depend on incremental gains among the small firms that make up 99 per cent of the business community.”