Responding to the announcement by the Chancellor today that National Insurance Contributions increase is to be reversed, Federation of Small Businesses (FSB) National Chair Martin McTague said: “This is an extremely welcome move – the Government has rightly listened to FSB’s campaign to reverse April’s National Insurance and Dividend Taxes. These made it more expensive for small business owners to pay employees or themselves, but it also made it more expensive to start-up as self-employed and reduced pay for millions of employees. It was a spectacularly bad tax, contributing to the economic slowdown and worsening the cost of living crisis. Small businesses are glad to see the back of it.
“Last year, we estimated that the jobs tax hike could mean 50,000 fewer jobs in economy and add billions to the costs of doing business, when small firms are already facing a toxic cocktail of rampant inflation, record-high interest rates, spiralling energy costs.
“Reversing all four NICs rises – employer, employees, self-employed and dividend equivalent – is a clear and decisive action support growth and will support livelihoods, jobs and small businesses across the UK, aligning with the Government’s levelling up agenda.
“In addition we are very pleased to see the Employment Allowance, the FSB-designed measure to remove the first £5,000 off every small employer’s NICS bill, retained at the same level. This means that small businesses can employ four staff on the living wage without paying a penny in employer NICs.
“Yesterday’s announcement of support on businesses’ energy bills will help many, but is yet to arrive. Following today’s positive development, small firms and the self-employed hope for a comprehensive and pro-business mini Budget tomorrow that will take a broader look at easing small businesses’ tax burden to unleash enterprise and spur our economy
“On the non-fiscal side, action to stem late payments through greater accountability and transparency for big corporates, and a commitment to smart and responsive deregulation would pay huge dividends without costing the public purse.”