Tax preventing employment

Posted on 16 Feb 2010 by The Manufacturer

The Federation of Small Businesses is calling on government to provide a National Insurance contribution freeze and rebates to small businesses to aid employment growth.

In the organisation’s January survey, more than half of small businesses reported that the UK tax regime has prevented them from taking on more staff. This was especially so in the South East (64 per cent), the North West (60 per cent) and London (59 per cent). Across the country the figure is 58 per cent.

The FSB is stepping says a freeze on National Insurance Contributions and a National Insurance rebate for businesses with fewer than 50 staff will help appease the problem.

“The January employment figures showed a welcome fall in the number of people out of work but we fear the severity of the recession will begin to be evident when the latest figures are released,” says John Wright, national chairman of the FSB. “What the UK economy needs is real action to get more people into work, especially under-25s, who make up a large proportion of those currently unemployed.

“A cut in National Insurance Contributions would encourage small businesses to take on more staff and grow their business. Small firms can help to strengthen economic recovery if they are given a chance to grow and flourish, but they will need a helping hand.”

The latest official unemployment figures are due to be released tomorrow.