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UK hit by “blue Monday” of new costs and tax reporting, claims federation of small businesses

Monday, April 1st 2019 - 05:44 UTC
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“This truly is blue Monday for small business owners” and it comes at a time when confidence is already low, said the FSB small firms' trade body “This truly is blue Monday for small business owners” and it comes at a time when confidence is already low, said the FSB small firms' trade body
Mike Cherry, FSB chairman, said: “a Business rate is an unfair, regressive tax that hits small firms before they've made their first pound in turnover, let alone profit”. Mike Cherry, FSB chairman, said: “a Business rate is an unfair, regressive tax that hits small firms before they've made their first pound in turnover, let alone profit”.
The FSB also pointed to the fact that two million small businesses are to be hit with new reporting requirements due to HMRC's Making Tax Digital (MTD) program. The FSB also pointed to the fact that two million small businesses are to be hit with new reporting requirements due to HMRC's Making Tax Digital (MTD) program.

UK small firms have been hit with “blue Monday” as new costs and tax reporting requirements kick in. While some firms in England will benefit from cuts in business rates, other changes mean additional costs. These include new rules on accounting under the Make Tax Digital program and auto-enrolment pension costs.

“This truly is blue Monday for small business owners” and it comes at a time when confidence is already low, said the FSB small firms' trade body.

From 1 April, there is some relief for small retailers, pubs and restaurants who will share cuts in their business rate bills worth about £500m.

In last year's Autumn Budget, the UK government announced a business rates discount scheme for small-sized high street properties in England which have a ratable value below £51,000.

Small firms will receive a one-third discount on their rates bills from Monday for the next two years.

According to the property services and software company Altus Group, the average shop will see savings of £3,292 in their business rates bills for 2019/20, while the average pub will save £6,052.

The average restaurant will receive a discount of £7,212, as a result of the new retail discount with councils in England setting aside £502m this financial year to cover the cost.

But it is not all good news, with local authorities in England still expected to rake in £25bn in business rates overall during 2019-20 - an increase of £206m.

Mike Cherry, FSB national chairman, said: “Business rates is an unfair, regressive tax that hits small firms before they've made their first pound in turnover, let alone profit.

”The help won from government to support those hurt most by the 2017 revaluation is now falling away, leaving many small businesses with a 20% hike to their bills, plus an inflation-linked increase.”

The FSB also pointed to the fact that two million small businesses are to be hit with new reporting requirements due to HMRC's Making Tax Digital (MTD) program.

HMRC is forcing VAT-registered businesses to comply with the initiative, with the software required to meet MTD obligations set to cost small firms £564 each on average.

More than a million small employers are also grappling with a further increase in auto-enrolment pension contributions to 3% from Saturday. Mr Cherry said the MTD was a “burden” that costs hundreds of pounds even “before you get to the time and resource needed to negotiate new software”.

And on the pension changes, he said: “Though small business owners are absolutely committed to helping employees save, auto-enrolment has already cost them significant amounts of time and money. When the 3% rate hits, the costs will be greater still.”

The government should rule out any further increases to the minimum auto-enrolment contribution rate for employers, he added.

Mr Cherry said: “For the first time since 2010, we saw a contraction in the size of the UK business community last year.”All ministers and policymakers need to take note, and avoid bringing in new measures that would exacerbate this loss in 2019.”

Categories: Economy, Politics, International.

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