FSB praises proposals for SME tax breaks

Recent government and opposition proposals to cut tax and red tape for small UK firms have been welcomed by the Federation of Small Businesses (FSB).

The FSB lauded the Leader of the Opposition’s demands for a six-month VAT holiday for small firms.

David Cameron’s calls for a postponement in the increase of the small companies tax rate and a 1 pence cut in National Insurance Contributions for firms with under four employees were also welcomed.

FSB national chairman, John Wright, said: “A VAT holiday would provide welcome relief to the UK's 4.7 million small businesses who are struggling with rising costs. We know that 90 per cent of all employers have fewer than four members of staff, so the plans to cut their NICs contributions will help shore up vital funds.”

The FSB - often a vocal critic of government policy - also praised the Labour administration for pledging to settle government invoices with small businesses within ten days and to postpone extension on flexible working.

Wright said: “Increased regulation can impact the growth potential of small businesses so a postponement of changes to flexible working will provide respite for businesses.

“We are also pleased with the Government's proposal to pay bills to small businesses within ten days. To this end we have also written to local authorities urging them to undertake similar measures and to pay their small business suppliers as early as possible.”