Corporation tax tipping small businesses in Essex over the edge
On 1 April 2023, the main rate of corporation tax increased from 19% to 25%.
A business owner in Essex says there is a concern for small businesses, as a tax increase is making it hard to invest in new staff and equipment.
The concern comes this week as corporation tax rose by 6%.
Sam Dimond is the owner of Spotlight Sound, an event hire and production and AV installation company based in Chelmsford.
He says the rise from 19% to 25% will hurt SME's, as they will stop investing in their own businesses.
He said: "They could stop hiring for example. We have seen real growth since Covid-19, and I have been able to grow my team from two to six people in the last year. We are based in the East of England where we have a substantial number of people out of work, being able to help our local jobs market is important to us. Luckily, we are booked up for the 2024 season but beyond that, we are just like any other small business and the future is uncertain for many."
Sam warns that if businesses are taxed more heavily, then there is less in their pot to grow the business, which is imperative for an economy to grow.
He said: "Tax increases like this just do not promote investment in the economy or country. For that, you need a favourable tax scheme. The fact that the government isn't looking to give tax breaks to small businesses will mean we continue to struggle as we are unable to grow."
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