Memories Haven’t Faded of April Tax Hikes, say Firms, as Personal Allowance Rises to £12,570

Relief for employees and sole traders is helpful, but businesses still face a higher tax burden than in March, at a time when other costs are spiralling

Responding to the roll-out of new income tax and national insurance contributions (NICs) thresholds from today, Federation of Small Businesses (FSB) Policy Chair Tina McKenzie said:

“It’s right that the Government ensures employees and sole traders can keep more of what they earn.

“That said, memories haven’t faded of the tax hikes that landed in April, which today’s changes only partially unwind. These adjustments shouldn’t be seen in isolation, we still face a higher tax burden than we did in March

“Higher Employer NICs rates still mean less money in the economy for pay rises, let alone sustainable investment, recruitment and discretionary spending.

“Though the Employment Allowance marks a vital relief on Employer NICs, and we’d encourage all small firms to check their eligibility, we need to see government go much further in addressing the cost of doing business crisis that underlies the cost of living emergency.

“Amid surging fuel prices, spiralling energy bills, higher debt costs, a weakened pound, supply chain disruption, labour shortages and new trade paperwork, firms are still faced with the biggest tax burden since the late 1940s.

“Taxes which are levied with no regard for profitability or ability to pay – not least business rates, NICs, VAT and fuel duty – are really hurting firms at the moment.

“Doing more to alleviate their impact on margins would go a long way to helping small businesses, many of which are hanging by a thread.”