Outlook: CBI Budget
Wednesday 03 February 1999
The problem is not the actual burden of taxation on companies, nor even the windfall tax, but rather the requirement that companies implement some key measures of government policy. These include the national minimum wage, the working time directive and the working families tax credit. These are an administrative headache for big employers, and a bit of a nightmare for small companies. While the Government has made much of its plans to encourage small businesses, with the Pre-Budget Report and the Competitiveness White Paper emphasising entrepreneurship, Gordon Brown will have to deliver the goods next month just to offset the adverse impact of these other measures. They fall most heavily on the tiniest firms.
Recent research at Bath University has shown that simply collecting national insurance and income tax contributions through PAYE costs businesses employing 1-4 people pounds 279 a year, whereas the cashflow each quarter means big companies benefit to the tune of pounds 11 an employee. The WFTC could actually end up requiring small employers to pay cash up-front to low-paid staff before they can reclaim it from the Inland Revenue.
Given that the Government buried the reports of two taskforces on small business - one on finance for high-tech companies and one on smaller quoted companies - by publishing their papers on the same day as the Pre-Budget Report, it is easy to see why the business organisations have become sceptical about how much genuine help the Government really has in store for the Budget.
They may be pleasantly surprised, for the Chancellor is sincere in his desire to stimulate enterprise and wealth-creation for the long-term benefit of the economy. Even so, a bit of tension in business-Government relations is a healthy sign of normality. It will keep both sides on their toes.
- 1 Finland schools: Subjects scrapped and replaced with 'topics' as country reforms its education system
- 2 The West has it totally wrong on Lee Kuan Yew
- 3 Watch: Man takes selfie every mile of 2,600 mile hike, creates amazing timelapse video
- 4 #FreeTheNipple: Women in Iceland bare breasts in solidarity with trolled student
- 5 Scientists have discovered a simple way to cook rice that dramatically cuts the calories
Germanwings captain Patrick Sondenheimer tried to break into locked cockpit door 'with an axe' as plane was descending
Amanda Knox murder conviction: Italian court overturns verdict for US student and Raffaele Sollecito in the killing of Meredith Kercher
Saudi Arabia says it won't rule out building nuclear weapons
The battle for the Middle East's future begins in Yemen as Saudi Arabia jumps into the abyss
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Revealed: Putin's army of pro-Kremlin bloggers
Germanwings plane crash: Co-pilot Andreas Lubitz wanted to 'do something people would remember him for'
Andreas Lubitz: Knee-jerk reaction to 9/11 enabled mass murder
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...