The prospect of tax increases in the emergency Budget is causing concern for small firms and hitting business confidence, a new survey has claimed.
The latest Economy Watch survey from the Forum of Private Business (FPB) found that 37 per cent of business owners polled in May 2010 reported a rise in the cost of running their firms.
Some 24 per cent said that the tax burden has increased and 28 per cent considered existing levels of taxation too high.
Many of the businesses surveyed expressed worries that tax increases in the Budget will have an adverse impact on them.
It is expected that the Budget will introduce a number of tax changes, as well as large public spending cuts, in an effort to tackle the deficit.
Areas of tax that may be affected include a higher rate of capital gains tax, a possible hike in VAT, and a form of increase in national insurance contributions for some staff.
The FPB pointed out that, although a reduction in the higher rate of corporation tax is on the cards, there has been no indication so far of a cut in the lower rate paid by small firms.?
Matt Goodman, the FPB’s head of policy, commented: “All eyes are on the 22 June budget for the kind of policies needed to help small businesses grow.
“We know that public spending will be cut to help get the deficit down, but there will be knock on effects to public sector contract opportunities and business support measures, so it is important that the coalition government gets it right – particularly in the area of tax.
“Running a business and controlling costs can be difficult. The government’s emphasis must be on helping entrepreneurs to run their businesses more effectively, and fostering confidence as well as re-balancing the economy.”
