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Forum of Private Business responds to the Budget 2015

Commenting on the Chancellor’s Budget Speech, Phil Orford MBE, Chief Executive at the Forum of Private Business, said:

“Our members were looking for fairness and stability in the Budget. Fairness when it comes to the business tax burden and stability in a year of political uncertainty to allow small employers to invest and employ with relative certainty. As we look now beyond the Budget, we call on the next government to put in place measures to put small business interests at the heart of party manifestos. The UK’s political parties should now be judged at the General Election on their commitment to put SMEs at the top of the political agenda, protecting the backbone of the British economy.

Tax

“Tax concessions and changes formed a key part of our members’ budget asks. We welcome the Chancellor’s decision to use taxation as a way to influence better business practice in the UK, to ensure that all businesses pay their fair dues and that the system doesn’t unfairly target many of the small to medium-sized firms that form the backbone of the UK economy.

Investment

“The Chancellor’s decision to introduce a single tax account may go some way reducing current bureaucracy. But this is no substitute for sitting down with your accountant and getting and invaluable detailed understanding of you business. Other OTS recommendations such as combining PAYE with NI would have had a greater impact. On Annual Investment Allowance, setting a permanent rate of £250,000 would have been a far more welcome move to encourage the continued business investment, however the consultation should lead to a longer term solution.

“Over three quarters of our members (78%) feel that there is a danger that HMRC could unfairly focus on small to medium-sized firms instead of tackling large corporate tax avoidance. The Chancellor’s measures to tighten up the rules and close existing loopholes announced today are positive steps towards creating a fairer system where larger businesses are seen to pay their fair share of taxes.

Business rates

“Business rates have been an ongoing concern for a large number of our members, with 55% in a recent poll seeing this as a significant barrier to business growth. It is good to see that George Osborne has taken on board our suggestions of short-term measures to reduce the pain of excessive property taxation ahead of the comprehensive root and branch review, with continued a continued cap of 2%, a £1,500 discount for retail properties and an extension of Small Business Rates Relief. However the devil will definitely be in the detail and whether the review will lead to concrete measures to tackle an issue that many small firms feel has needed addressing for some time.”

Export Tax Relief

“Foreign investment also remains a key focus for future growth. While we welcome the Chancellor’s measures to encourage trade with China but we would like to have seen additional tax incentives to encourage a wider spectrum of smaller firms to consider trading overseas. Further stimulus will be crucial if we are to remain on course to meet the UK’s ambitious export target of £1 billion by 2020.”

Cost of doing business

“The biggest single cost for our members in the last year was staff costs as businesses prepare for pension auto-enrolment and look to retain staff as the economy grows. The increase in the National Minimum Wage to £6.70 and the 20% increase in Apprenticeship National Minimum Wage may lead to problems for members in labour-intensive industries, particularly those providing services for councils and the public sector. However this will somewhat offset by the changes to employers National Insurance.

“In short this was a holding Budget with announcements of key consultations that could lead to significant small business changes post Election.”

For media comment contact John Walding, Media and PR Officer, at john.walding@fpb.org or 01565 626016.

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