NIC holiday is not enough, says FPB

Date: 8th September 2010

The government's National Insurance contribution (NIC) holiday for new small businesses, does not go far enough, one industry body has claimed.

According to the Forum of Private Businesses (FPB), further cuts need to be made if small businesses are to be at the forefront of a private sector-led recovery.

The holiday, which launched earlier this week, sees new small businesses operating outside of London and the south-east exempt from NIC for up to ten employees.

This could potentially save small firms up to £50,000 over their first year in business.

However, the FPB has claimed that unless further cuts follow the initiative disproportionate taxation will 'remain a major barrier' to growth.

Phil Orford, the forum's chief executive, said: "For years small business taxation has steadily increased, so this reduction in NI for some firms has to be welcomed.

'However, if the government is serious about creating conditions for real economic recovery based on strong small business growth, it needs to introduce even bolder tax policies.'

Posted by Thomas Fletcher