Give UK businesses a break Mr. Chancellor

The UK will see a significant rise in business failures next year if Gordon Brown does not use the pre-budget statement (2nd December 2004) to address the weight of red tape and the excessive tax burden facing small firms, claims leading cash flow specialist Bibby Financial Services.

Since 1997, Budget changes have pushed up overall business taxes by a cumulative 40 billion, while legislation such as the introduction of the minimum wage and rises in National Insurance contributions have raised the cost of employing staff. More recently interest rate rises combined with increases in oil prices (up 70% on last year) have left many small firms battling to remain in the black.

Bibby Financial Services is calling on the Chancellor to throw a lifeline to the small business community in the pre-budget statement by: -

Delaying again the inflation adjustment to excise duty on fuel Increasing the approved mileage rates for fuel reimbursement, to take into account the rising cost of motoring Returning National Insurance contributions to their 2002 levels - 11.8% Putting a freeze on the National Minimum Wage Reducing small companiesí corporation tax liabilities by reviewing the threshold. Currently only companies making less than 10,000 p.a. are tax exempt

Bibby Financial Services chief executive David Robertson said: ìThe state of the small business market appears precarious as we look ahead to 2005. The British Retail Consortium is predicting the economy will slow next year, while the CBI quarterly survey has seen manufacturing orders falling at their fastest rate for a year.

ìThe Chancellor needs to act now if he is to avert potential problems and if he wants to win the vote of Britainís small business owners and managers in the forthcoming election. Small firms are the powerhouse behind the British economy and if they are put under undue pressure, there will be significant repercussions for UK PLC as a whole.î