Some small businesses could go bust in Oxfordshire
The FSB say businesses will be forced to rise their prices which could draw customers away
The Federation of Small Businesses (FSB) in the Thames Valley region is warning that we could end up loosing some small businesses across Oxfordshire in the future, after the Chancellors Autumn Budget announcement.
Rachel Reeves announced in last week’s Budget that the rate of employers' national insurance (NI) will rise by 1.2 percentage points, from 13.8% to 15% from April next year.
The secondary threshold, at which employers start paying the tax on each employee's salary, will also be reduced from £9,100 a year to £5,000.
James Anderson is from the FSB for Oxfordshire, and he said: “We as a society will end up paying more for things and at the moment where the cost of living is still a real issue that people are talking about and affecting people – people will make their choices with their wallets.
“To the detriment of the small business they will stop going, and it’s at that point that we’ll then see businesses starting to go bust and out of business.”
James also explains that the increase to employers NI will “be passed onto the consumers” as businesses are forced to hike their prices.
He said: “Small businesses are being hit with increased costs and those costs will be put on their customers and then it’s whether or not people keep spending money if everything is more expensive.
“Most small businesses run on really tight margins, and they can’t afford not to have those small margins of profit otherwise they will go out of business, so what you’ll find is that these small increases that they’ve been given will just be put onto the consumer.
A spokesperson for HM Treasury said: “The Budget fully backed small businesses - capping corporation tax, reducing national insurance bills through the Employment Allowance and providing £2.2bn relief from business rates.
“Increasing employer National Insurance will raise over £25 billion, mostly from large businesses, to help fund the NHS and protect working people’s payslips from higher taxes.”
‘Employment allowance rise welcome’
However, It’s not looking all doom and gloom for small businesses, as the FSB say they welcome the employment allowance rise.
In response to the Chancellor’s Budget statement, Policy Chair of the FSB, Tina McKenzie, said: “Increasing the employment allowance for small businesses by a record amount is a very welcome move and we’re pleased the Chancellor has heard us loud and clear.
“More than doubling it, from £5,000 to £10,500, will shield the smallest employers from the jobs tax, therefore is a pro-jobs prioritisation in a tough Budget.”
“The decision to protect small businesses from an inflationary hike in business rates, by freezing the small business multiplier, will help small firms with premises across all sectors. Meanwhile, extending business rates relief, albeit at a lower level, for small firms in retail, hospitality and leisure will mitigate a potential cliff-edge tax hike for those in some of the toughest sectors.
“The true test of today’s Budget will be whether small businesses can grow and end the economic stagnation the UK has been stuck in.”