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Mixed messages for SMEs

According to a paper recently released from the Adam Smith Institute – a respected think tank – SMEs could, if their tax burden were to be eased, potentially offset the jobs being lost in the public sector. One area being considered for change is the National Insurance Contribution (NIC). The think tank suggests that by replacing NIC with private insurance, it would encourage small business owners to create jobs and start hiring again.

The paper, called ‘Unburdening Enterprise’, proposes a reduction in regulation and a general easing of taxes to regenerate confidence within SMEs. It also proposes that the coming hike in business rates should be abandoned. The institute believes that tax ‘holidays’ do not achieve the desired result because temporary easing does not generate the confidence required for long term planning. Without this, job creation stalls and, given the economy may have just begun a cautious upswing, the institute recommends the creation of further incentives to encourage self-employment. This, through fixed term and temporary contracts, should result in hiring costs for SMEs to be reduced, further encouraging job creation.

However, the release of the institute’s paper comes as research just published – this time from an accountancy firm – appears to reveal that HMRC is, in fact, specifically going after SMEs to achieve increased tax goals because they are considered to be easy targets. Given all of this, the small business owner in Birkenhead or Chester might consider the support that can be provided from a contractor cheap accountant to be an essential investment, particularly now through these difficult times.

Posted by Louise
November 5, 2012
Research & Statistics

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