Federation of Small Businesses calls for reform

Business rates are the third biggest expense for small businesses, according to the Federation of Small Businesses (FSB), which said the gorvernment needs to abolish the tax.

The FSB welcomed the Chancellor George Osborne’s announcement in his Aumtumn Statement to freeze business rates for small businesses for another year, but called for “fundamental reform”.

“The FSB is delighted to see the double small business rate relief remain for another year and a full review of the outdated business rates system, something we’ve long argued for,” John Allan, FSB National chairman said.

Allan continued: “This urgent review of the business rate system is critical to supporting small businesses. The current system is out of date and needs to be put out to grass. It’s complicated, opaque, regressive and unresponsive to changes in economic conditions. Many of our members tell us paying business rates is their third biggest cost after rent and wages, yet the tax is poorly targeted and not based on ability to pay.

“All businesses will be grateful for this review, but let’s be absolutely clear on what businesses want - fundamental reform of the business rate system. The announced package of renewed reliefs, will also be essential, as they will help bridge the gap until fundamental reform can deliver the change everyone agrees must now come.”

The FSB is a leading business organisation with over 200,000 members. The organisation welcomed the national insurance relief offered to employers with apprentices but said further reform to these rates was also necessary.

“Small businesses have been responsible for the majority of the jobs created in the last few years. But many of our members tell us they struggle to find young people with the skills they need. The National Insurance relief for businesses taking on apprentices under the age of 25 will encourage businesses to take on even more young people and tackle the UK’s skills gap head on.

“However, this will need to be supported by a reformed apprenticeship framework and funding mechanism that does more to encourage small businesses to invest in developing their workforce through high quality apprenticeships. We look forward to working with the Government to ensure this happens,“ Allan concluded.

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