The FSB calls for:

1 Reduction of the Financial Burden:

National Insurance

• the Chancellor to rescind the increases in National Insurance Contributions.
  
• the abolition of Class 4 National Insurance Contributions as a “tax impost”.
  
• the reversal of the breach of cap in Class 1 and Class 4 National Insurance Contributions.
  
• the hypothecation of all National Insurance Contributions to provide benefits for the contributors and a commitment not to use the revenue as a general method of taxation.
  

Capital allowances

• staged increases in capital allowances, initially increasing the general First Year Allowance from 40% to 50%.
  
• extension of any 100% First Year Allowance to include the purchase of machinery and personal protective equipment, including replacement equipment, intended to improve workplace health and safety.
  
• 100% First Year Allowance to be made available for investment in ensuring that business premises comply with the requirements of the Disability Discrimination Act.
  
• enhanced Capital Allowances to be made available for investment in waste management infrastructure.
  

Transport

• the Chancellor to provide adequate funding for both road and rail, so that an effective integrated system of transportation is developed within the next decade.
• The FSB asks the Chancellor to reject revenue-raising schemes such as workplace parking charges and road tolling due to the additional, indiscriminate burden they place on small firms.
  
• a major reduction in pump prices by reducing fuel duty.
  
• the inflationary effects of price rises in producer fuel costs to be avoided by compensating adjustments to fuel duty.
  
• the Chancellor to extend his assurance that duty on non petroleum fuels will be maintained at their current level until 2010 and the prioritisation of further assistance to business conversion of vehicles to utilize non petroleum fuels.
  

Environmental Taxation

• the Treasury to ensure that the design of environmental taxes addresses the issues directly, have carefully developed transition mechanisms and do not penalise small businesses.
  
• the repeal of the Climate Change Levy until it can be demonstrated that it delivers its environmental aims without disproportionately burdening small business.
• the repeal of the Aggregates Levy.
  
• a portfolio of options for revenue recycling of landfill tax increases back to business should be developed, focussing on providing incentives and assisting business to shift to more sustainable waste practices.
• additional funding for the Envirowise project, which has the potential to genuinely assist small businesses to address waste minimisation, conditional on a review and further development of the Envirowise services to small businesses.
  

2 The Informal Economy:

• the Chancellor to make an immediate and substantial increase in the level of personal allowances to £8,500 and, in future years, to increase the allowance by no less than the rate of growth in average earnings & to consider the transferability of Personal allowances between spouses
  
• The simplification of the tax system, freeing resources to administer the tax system efficiently
  
• the adequate resourcing of the Inland Revenue to ensure that the bureaucratic burden on small businesses is minimised.
  
• the minimisation or removal of the burden of new legislation on small businesses
  

3. Mismanagement of the UK Tax System:

• for an end to the delivery of social policies through the employer payroll.
  
• State benefits and the collection of loan repayments to be administered by the experts.
  
• FSB urges the Government to reduce the burden on business by facilitating a change in the VAT regime which would allow the VAT free movement of goods and services between registered traders.
  

4. Regulatory Burdens:

Insurance

• the broadening of the Pool Re system to underwrite the provision of Employer’s Liability -Funding to be provided by allocating the ‘windfall’ element of the Insurance Premium Tax to Pool Re.
  
• an end to ‘no win no fee’ ambulance chasing.
  
• the Courts to take a realistic view of settlement figures in order to avoid inflating expectations, claims and costs.
  

IR35

• the introduction of a Right to be Self-Employed, allowing individuals to certify themselves as self-employed.
• the immediate repeal of IR35, which is an administrative for both Inland Revenue and taxpayer alike.
  

5. Self-Employed or Incorporated?:

• a new Small Business Allowance of £10,000 for unincorporated businesses so they can enjoy an equal benefit to the new zero rate of corporation tax for the first £10,000 of profits.
  
• the Chancellor to avoid future distortions in the tax system, and to introduce measures that are of benefit to the entire small business sector and not just to one section of it.
  

6. Other Taxation Matters:

• tiered entry to VAT.
  
• the Chancellor to address urgently the provision of a state backed , fully funded pension to sit between the basic state pension and commercial private pension arrangements.
  
• a monthly direct debit payment facility for both income tax and VAT.
  
• the interest paid on overpaid tax to be at the same rate as that charged for the late payment of tax.
  
• the Chancellor to act to encourage business owners to retain profits in their businesses.
  

7. Funding the Proposals

• The FSB calls on the Government to tailor its taxation policy to what the population can afford rather than what the Government wishes to spend.
  
  
• The National Audit Office have highlighted that there is considerable waste and misuse within current spending policies, both in Britain and in the European Union. If tackled effectively the available savings would provide ample scope for the increase and changes to personal allowances that we have proposed.
  

Please click here to read our full 2004 Budget Submission.