Small business community underwhelmed by Osborne’s post-Brexit corporation tax cut
George Osborne’s proposals to boost the post-Brexit British economy by slashing corporation tax to below 15 per cent have been met with a less than enthusiastic response.
The tax is currently levied at 20 per cent of firm profits, but the chancellor told the Financial Times that decreasing it would show investors the UK is open for business.
Some critics have dubbed the proposals as plans to turn the UK into a tax haven, with others highlighting more effective uses for the money the policy is set to cost. Among those in the small business space, many have dubbed the plan inadequate.
corporation tax is only taken on profits but business rates are taken before you even make a sale, Federation of Small Businesses (FSB) policy director Mike Cherry told the Evening Standard.
James Fox, a self-employed contractor working in management consultancy, was also skeptical that the move will benefit owners of Britain’s smallest firms. The cut in corporation tax is of course welcome, but it is cancelled out by his dividend tax changes which will hit the main source of income for small businessmen, he told Business Advice. He’s taking with one hand and giving with the other.
Other small firm owners were more welcoming of the proposals. “Despite being firmly against Brexit, I feel we need to make the most of the position we have found ourselves in, explained Florence Adjepo, founder of MDMflow. Anything that supports small business growth and encourages investment can only be a step in the right direction.”
In an open letter to the government, business groups including the FSB and the British Chambers of Commerce (BCC) called for additional moves from policymakers to strengthen the economy as Brexit negotiations get underway.
“Across the UK, the firms and business leaders we represent are considering the opportunities and challenges arising in the wake of the EU referendum, the authors wrote. “This may be a time for calm reflection, but it is not a time for inaction.”
In the wake of the referendum result, a statement released by ecommerce platform eBay saw the firm pledge to support sellers as changes come into place.
Hannah Wilkinson is a reporter for Business Advice. She studied economics and management at Oxford University and prior to joining Business Advice wrote for Kensington and Chelsea Today about business and economics as well as running a tutoring company.
Markets and the economy generally will no doubt fluctuate as a a result of Britain's decision to leave the EU, and chancellor George Osborne may even call an emergency Budget a measure that could bring about significant changes to the tax system. more»