Business taxes biz4biz

Business picks up the bill again!

As I inferred in my piece regarding “Redundancies or Resignations” which can be seen here https://biz4biz.org/will-we-face-redundancies-or-resignations-with-the-removal-of-furlough/ demands will be made upon business to support various increased costs of the Covid fallout. It is clear that the profligacy from quantitative easing is over and government will now find new ways to raise funds as demonstrated by the recent 2.5% increase in National Insurance (1.25% Employee and 1.25% Employer). It’s an inevitability of the costs created in fighting Covid, but some would argue is further proof of how little thought Government has for the process of running a business.

Businesses do not have a vote in General Elections but are required to foot the bill for pretty much all our governments spending. Covid support mechanisms like Furlough schemes are hugely supportive of the Electorate, individuals who get the opportunity to vote have maintained their employment, whilst business activities have been greatly reduced.

Unfortunately, this government is creating the wrong impression almost every time the Prime Minister speaks. Activities like the NI tax increase are not temporary and will exist forever and are in fact a direct tax on employment. It’s just one of many taxes imposed like, insurance tax, increased several times since inception, VAT -ditto only ever increasing, the Apprenticeship Levy which has a use by date and corporation tax increasing significantly from 2023. It all sounds like “Oliver Twist” no not “please sir can I have some more” but more like “gotta pick a pocket or two.”

The issue is how much more cost will sneak up on business and remain fixed forever? Each additional cost whilst increasing the spending power of government, increases the disincentive of starting or owning a business, creating a strong economy, and maximising employment and reducing Welfare and unemployment costs.

For some months now there has been an inference that Government will disconnect their relationship with LEP’s the only apolitical, business facing, local government group, responsible for the provision of Growth Hubs, Inward investment and Tourist Hubs, Enterprise Zones and Innovation and Skills investments, this past 10 years.

Clearly Government is saying to Businesses give us your money, but we do not want to hear your opinion! Just be careful how distanced you appear from your major benefactors; you might be accused of being out of touch which would be a real shame!

There is so much more that Government can do to maximise its income from Businesses without increasing taxes and they need to start looking at these innovative options now.

 

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