The Federation of Small Businesses (FSB) has urged Chancellor Rishi Sunak to use the upcoming Spring Statement to help small employers with ‘spiralling overheads’.
The business group has recommended an increase in the Employment Allowance to £5,000 to help free up funds for investment and expansion.
Research carried out by the FSB showed that the planned 1.25% increase in employer national insurance contributions (NICs) will add more than £3,000 to an annual tax bill for the average small and medium-sized enterprise (SME).
National Chair of the FSB, Mike Cherry, said: ‘The chilling impact of national insurance hikes will hit the pay of those in regions that need help the most.
‘Slamming small firms with a jobs tax hike will put the brakes on investment, upskilling and growth within communities most affected by the pandemic.
‘At its forthcoming Spring Statement, the government can still make a difference by increasing the Employment Allowance to £5,000 and adopting our proposal to take an additional 200,000 small firms out of the business rates system in levelling up target areas.’
The Chancellor will present the 2022 Spring Statement on 23 March.