Tax Increases Will Be Last Straw For Thousands Of Small Business Owners As 1 In 5 Has Already Considered Closure
Ahead of Autumn Budget on Thursday 17th November 2022, Purbeck Personal Guarantee Insurance, the U.K.’s only provider of personal guarantee insurance (PGI) to small business owners, is urging the Chancellor to reconsider the scale of tax increases and cuts to small business support amid fears that they will prompt many small businesses to simply shut up shop for good. In a recent survey of 1000 small business ownersi, Purbeck found that close to 1 in 5 had already considered closure in the past year because they cannot afford to keep running their firm and just over half (52%) were simply treading water and could only focus on keeping their business on an even keel over the next year.
It has been reported that Ministers are set to scale back or close The Help to Grow programme, extend the freeze on the £85,000 value added tax threshold until 2028, and introduce a wider package of tax hikes, including increasing corporation tax and the dividend taxii.
In response, Purbeck Personal Guarantee Insurance has set out its own wish-list to the Chancellor:
- Reduce business rates and keep National Insurance down to stop eroding the hard-earned pre-tax profits of small businesses
- Develop tax incentives to encourage growth and investment such as increasing the annual investment allowance and supporting start-ups with a reduced rate of corporation tax (for certain turnover thresholds)
- Continue to tackle the UK’s poor late payment culture by making Audit Committees directly responsible for ensuring best practices within supply chains.
- Deliver on the promised Energy Bill Relief Scheme to cap the amount small firms can be charged for their energy billsiii.
- Help small businesses with their own green agendas and the move to renewables through specific initiatives for some higher energy users in the small business sector.
Todd Davison, MD for Purbeck Personal Guarantee Insurance said: “Life is already very tough for many small business owners and it is a particularly worrying time for those who have signed Personal Guarantees for business loans, putting their homes on the line for their businesses. The Chancellor needs to find ways to boost the engine room of our fragile economy or risk mass business failures and all the fall out that will entail.”