FSB say Budget will disappoint self-employed

Britain's three million self-employed will be disappointed that Gordon Brown has failed to fulfil his pledge to encourage enterprise in today's budget, according to the Federation of Small Businesses (FSB).

Commenting on Gordon Brown's Budget, Northern Ireland FSB Spokesperson, John Hurson said: "The rise in Employers' National Insurance is a direct increase in business costs and when combined with the increase in the Employees' NI Contributions, this is the equivalent of an increase of 2p on income tax.

"However, it is a tragedy that the Chancellor has decided that the self-employed will also pay higher National Insurance Contributions. The average income from self-employment is just £13,890 compared to an average income from employment of £21,842 per annum. This undermines any attempts the Chancellor has made to help the low paid."

On the reduction to small business corporation tax, Mr Hurson said: "The announcement on corporation tax will help incorporated small businesses. The abolition of 10 per cent rate tax band for businesses with annual profits of less than £10,000 will be a great help to fledgling companies. But over two-thirds of small businesses are unincorporated, and once again the Chancellor has done nothing for the self-employed. In fact the inequality in their tax treatment has widened."

However, on the VAT flat rate scheme Mr Hurson said the new flat rate would give "real benefits to small businesses, possibly as high as the Chancellor's estimate of £1,000. Up to 700,000 small businesses will be affected once the flat rate is extended to businesses with a turnover under £150,000. We are also pleased with the abolition of automatic VAT fines."

Mr Hurson also said that FSB was disappointed that the Chancellor had failed to recognise the role small businesses played in administering welfare payments. He concluded: "The costs imposed on small businesses by the Government delivering social policies through the employer payroll have increased dramatically since 1997. Whilst we welcome payments to small employers, we believe the Inland Revenue should re-take responsibility for administering the welfare state."

(MB)