Press Release
National Insurance Rise Feared by UK SMEs
22nd April 2003 - Nearly a third of British SMEs believe that increases in National Insurance Contributions (NIC) would do greater damage to their business than any other form of tax increase, according to preliminary findings from the Tenon Forum Quarterly Report on Entrepreneurial Britain, due to be released in May. The finding is published as increases in NIC come into effect on 6 April 2003 and serves as a warning to the Chancellor, ahead of next week’s budget, of the opposition that any further increases in NIC would ignite.
The research was conducted by NOP on behalf of the Tenon Forum, an independent think-tank made up of representatives from the UK’s small and medium sized business community, and set up by Tenon, the national provider of business services and advice. The findings reinforce recent research by the British Chambers of Commerce, which found that a third of SMEs expect to cut jobs as a result of the April 6 increase.
The research also reveals that, as they prepare to start a new tax year on 6 April, a significant proportion of SMEs want greater transparency from the Government about future tax rises. 26% think the Government should clarify how much tax they plan to impose on businesses in the long term.
Andrew Hubbard, Director of Taxation at Tenon comments: “Government must recognise that the needs of SMEs are just as important as the needs of big business; and this National Insurance rise is going to hit SMEs particularly hard. 80% of businesses in Britain are SMEs and their needs cannot be ignored.
“Although the Government constantly stresses the key role that small businesses play as the engine room of the economy, there is a huge gap between what it says and what it actually does to support SMEs. The rise in National Insurance Contributions that has already been announced is clearly going to strangle growth for SMEs; any further increases could be catastrophic. If Government wants to encourage people to start and grow new businesses it needs to demonstrate by actions that it understands the pressures facing entrepreneurs. Comforting words are not enough."
For further information please contact
Tenon Forum press office - 020 8877 3024
rebecca@saltlondon.com -
07967 205508
michelle@saltlondon.com
Notes to editors
The Tenon Forum is an independent think tank made up of leading entrepreneurs from the UK’s small and medium sized business community. The Tenon Forum Think Tank meets once a quarter to analyse issues arising from a quarterly survey, a substantial piece of research carried out by NOP. A report based on the research and the Think Tank’s commentary will be published quarterly. The second report will be published in May, future reports will be published in August and November 2003.
The second report is based on research conducted by NOP in March 2003. They interviewed 1,000 MDs, FDs and other senior directors of small and medium businesses – firms with between 5 and 499 employees. The survey covers all business sectors across the whole of England, Scotland and Wales and the results have been weighted to provide a representative sample of the British economy.
