Government Stealth Tax On Small Businesses Discovered By FSB

THE FEDERATION FOR SMALL BUSINESSES (FSB) has discovered that 48 per cent of business sectors have seen a rise in the level of flat rate VAT they pay.

The Federation has discovered that the flat rate VAT charged by HMRC to the smallest of businesses has risen to a higher level, and the FSB has urged the Government to review the issue in its Budget submission to the Chancellor this week.

Flat rate VAT is charged to the smallest businesses with a turnover of less than £150,000 and aims to minimise the red tape around administering VAT providing a slightly lower rate which varies dependent on the sector the business operates in.

FSB analysis of the rates has found that businesses operating within the agricultural services sector and membership organisations have seen rates increase by a huge 2.5 per cent. For grocers, newsagents, tobacconists and clothing shops: rates have risen by 1.5 per cent – as have those for businesses involved in social work.

At the other end of the scale, estate agency and property management services will see their rate decrease by 0.5 per cent, and computer repair services by 1.5 per cent.

In its Budget submission, sent to the Treasury this week, the FSB has called for the flat rate VAT to be immediately reviewed. Other key asks in the submission included:-

  • A complete freeze on National Insurance Contribution (NIC) rises, and a reverse on the Government’s plan to increase employers’ NICs in 2011
  • An immediate reform of the tax system:
  • Raising the level at which businesses have to register for VAT
    Standardising personal allowances for all forms of NI and income tax
    Improving tax guidance for start-up businesses and new employers
  • Cancellation of the planned one per cent rise in corporation tax in 2011

Essex FSB Chairman, Iain Wicks, said:  “When VAT was lowered in December 2008 many rates stayed the same and some were reduced by up to 2.5 per cent.

“What has become apparent is that after VAT was put back to 17.5 per cent in January this year, nearly half of the flat rate schemes have seen the VAT level rise above the pre-decrease level. 

“While a few sectors have seen a decrease, the majority of businesses from Essex, Havering or Redbridge using this scheme will see their rates rise, which is unacceptable at a time when cash-flow is limited.

“Essex FSB believes that this is a stealth tax, which will affect a firm’s overall profitability, deliberately directed at small businesses during the recession.

“Essex FSB believes there needs to be more openness in how these rates are calculated and when they rise.

“The Budget is the Governments chance to put flat rates back to 2008-levels and remove the additional tax burden imposed on small businesses.”

CPBC To Host ‘Voice Of Business Briefing’

CASTLE POINT BOROUGH COUNCIL and Essex Federation of Small Businesses are joining forces to hold a special Voice of Business Briefing for local businesses at the council offices in Kiln Road, Thundersley, on the evening of Wednesday, 3rd March 2010.

South East Essex FSB Branch Chairman, Terry Taber, said: “The Castle Point Voice of Business Briefing is a new partnership event between Essex FSB and Castle Point Borough Council with the aim of providing local businesses with information to help them prepare for the end of the recession.

“Representatives from Banking on Essex will be speaking about the loans and overdrafts they are offering viable businesses to help them cope with the shortage of finance from High Street banks, and we are hoping that Jobcentre Plus will be present to talk about the financial and other support they can provide for businesses.

“The Castle Point Borough Council Economic Development Team will also be outlining the work they are doing and the support available locally.

“Main speaker for the evening is Steve Clarke of Eureka Sales Solutions who will be giving his new presentation on how to prepare your marketing strategy so that you are ready to attract new customers and encourage existing customers to buy more from your business as the recession begins to end.”

Castle Point Borough Council Leader Cllr Mrs Pam Challis OBE said: “The programme for this briefing is packed with practical information and help for businesses and we hope that we will see a lot of Castle Point firms book in to attend.

“Working with partners such as Essex FSB and Essex County Council means that we are able to bring together a wide range of expertise which means the programme is very full; but is also very useful in signposting businesses to people which can help them.”

Places for the Castle Point Voice of Business Briefing can be booked at www.fsb.org.uk/essex/castle-point-seminar

Small Businesses Should Take Advantage Of £2,500 Apprenticeship Grant

SMALL BUSINESSES IN ESSEX should make the most of a new Government grant announced this week to help them employ apprentices, says Essex Federation of Small Businesses.

Essex FSB Education, Skills and Business Support spokesman, David Miles, said: “The Government this week announced that for every apprentice aged 16 or 17 that a firm takes on they will receive £2,500 to help with the salary costs as well as having all the training costs paid for.

“That is a big boost for a small business and we hope that a lot of Essex businesses will take advantage of this opportunity to recruit additional staff to help them as we head out of recession.

“Coupled with the work being done by Essex County Council through its apprenticeship scheme this offer makes employing a young person a very attractive option for local firms.”

Further details on the £2,500 grant plus the range of apprenticeships available will be available at a free to attend meeting on Thursday 04 February 2010 being held at Stansted.

More details and bookings are available at www.fsb.org.uk/essex/apprenticeships-briefing.

Second Chance For Businesses To ‘Come and meet the lenders’

ESSEX FEDERATION OF SMALL BUSINEESES is urging businesses from across Essex to visit County Hall on Thursday 28 January 2010 when a second Meet The Lenders event will be held in the Atrium from 9.00am until 5.00pm.

Essex FSB Education, Skills and Business Support spokesman, David Miles, said: “There is no doubt that businesses are still finding it difficult to access finance from traditional High Street banks, even though we are told we are coming out of recession, which is why Essex FSB is encouraging businesses to come along to this event.

“The first event on Thursday 14 January 2010 was popular and we are pleased a second event is now being held on Thursday 28 January 2010.

“Once again the main exhibitor is the team from Banking on Essex who will be able to explain how to access the funds they have available for Essex businesses.

“Other exhibitors include: Business Link, Colchester Business Enterprise Agency, East of England Development Agency, Essex Innovations, Essex Apprenticeships and
UK Trade and Investment.

“We hope that as many businesses as possible, which are looking for finance in 2010. will come along to this event and take advantage of the information and advice available.”

County Hall To Host ‘Meet The Lenders’ Event For Local Businesses

LOCAL BUSINESSES seeking finance this year are being urged to visit County Hall, on Thursday 14 January, when a Meet The Lenders event will be held in the Atrium from 9.00am until 5.00pm.

Essex FSB Education, Skills and Business Support spokesman, David Miles, said: “There is no doubt that businesses are still finding it difficult to access finance from traditional High Street banks, even though we are told we are coming out of recession, which is why Essex FSB is encouraging businesses to come along to this event.

“The main exhibitor  is the team from Banking on Essex who will be able to explain how to access the funds they have available for Essex businesses.

“Other exhibitors include: Business Link; Colchester Business Enterprise Agency; East of England Development Agency; Essex Innovations; Essex Apprenticeships and
UK Trade and Investment.

“We hope that as many businesses as possible, which are looking for finance in 2010, will come along to this event and take advantage of the information and advice available.”

Businesses Urged To Use Ombudsman Over Music Licenses

LOCAL BUSINESSES ARE BEING URGED to use the PRS For Music Ombudsman service if they feel they are under pressure to buy expensive licenses for playing music on their premises.

“The Performing Rights Society (PRS) developed a reputation around a year ago for ‘bullying’ businesses due to the aggressive and threatening approach that was made when they discovered a business was playing music on its premises,’ said David Miles, Education, Skills and Business Support spokesman for the Essex Federation of Small Businesses (FSB).

“Essex FSB is all in favour of musicians being rewarded for their work; but the way the PRS was approaching many small businesses was very negative and it was taken up with them last spring. That led to a new annual charge of £44 per year for businesses with less than five staff, a considerable saving on the previous £84 fee, and a promise that there would be a more business friendly approach.

“Sadly, from reports we have recently received from some of our members, the old style approach from the PRS is creeping back in and we believe businesses that are not happy with the way the PRS is treating them should start using the little known independent ombudsman service which can adjudicate on such issues.

“The PRS for Music Ombudsman service was set up to sort out disagreements between PRS for Music and those who may require or have obtained a licence for the public performance of copyright music, and we believe it is time that businesses started using this service to get the message home to the PRS that they have to act in a reasonable and responsible manner.”