Emergency budget must think about freelancers

Freelancers and small business owners will be particularly interested in what George Osborne has to say on the subject of helping business growth. They hope he will announce measures to allow businesses to grow, innovate and employ.

The FSB has written to the Chancellor urging him to 'think small first'. The Federation wants Osborne to recognise that small firms have difficulty with cash-flow and urges him to take this into consideration if tax rates, such as VAT, are to change. The reduction in the VAT rate in 2008 cost SMEs around £1,500 in administration costs alone. Reversing the decrease would again impose a similar financial burden on already cash strapped enterprises.

A major increase in the rate of CGT would also cause problems for small business owners, claims the FSB. They think it should remain at the current rate of 18% and taper relief should be reintroduced.

20% of small businesses say that NICs and PAYE are hampering their ability to grow. Although the FSB agrees that the coalition must cut the fiscal deficit, it should not be done in such a way as to increase the tax burden on small firms.

The National chairman of the FSB, John Walker, also suggests that the current proposals to give a National Insurance holiday to new businesses should be extended to help all businesses take on additional staff. The would lead to a win win situation for the government as less people would be claiming jobseekers allowance and more employees would be paying tax and NICs.

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