BCC calls for NIC increases to be scrapped

Date: 16th February 2010

Increasing National Insurance Contributions (NIC) would be the "most damaging" tax rise the government could impose on British businesses, a new report has suggested.

Data from the latest Monthly Business Survey from the British Chambers of Commerce (BCC), has revealed that just six per cent of respondents said a NIC rise would have the least impact on their business.

By way of comparison, 36 per cent said that a small rise in VAT would be the "least damaging" option.

The report also revealed that businesses have said reducing the budget deficit should be the government's "number one priority".

As such, the BBC has now called for planned NIC increases to be scrapped in favour of a VAT rise and "targeted spending cuts".

David Frost, director general of the organisation, said: "Raising a damaging tax on business, like NICs, will be counter-productive.

"It will mean fewer jobs and less tax revenue in the long-term. While businesses fully understand the need to bring down the UK's deficit, they are clearly saying that using VAT would be a less damaging way to achieve this."