FSB: NIC holiday needed
Oct 19 2011
The FSB wants an NIC holiday for small firms
A targeted VAT cut and a National Insurance Contributions (NICs) holiday must be introduced for small firms to aid growth, says the Federation of Small Businesses (FSB).
According to the FSB’s ‘Voice of Small Business’ Index, confidence within smaller companies fell to -9.3 due to the pressure of weak demand and rising costs.
This represents a fall of 9.6 points from in the third quarter as more businesses lost confidence in the economy.
The FSB has long called for the current NICs holiday to be extended to existing businesses across the UK that have fewer than four employees.
One in 10 businesses (11 per cent) say that extending the NICs holiday would be an incentive to take on staff, according to recent FSB research.
The current NICs holiday is only open to new start-ups and has not had the take-up that the government expected it to, with only 7,000 businesses using it. By extending it, the government has the opportunity to put more people in a job which in turn would boost the tax base and money to the treasury, says the FSB.
FSB national chairman John Walker says, ‘As businesses come to terms with the double whammy of falling revenues and rising costs, it is no wonder that they're losing confidence, and unfortunately, as their overheads increase one way to control it is to lay off staff.
‘It is the first time since we started the Index that we have seen more people believe that they're going to lay off staff than take them on. This has to show the government that a more robust plan for growth is needed.’
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