National insurance should not be raised, BCC demands
The government should not look to increase national insurance rates 2011, one commerce organisation has noted. Businesses have raised concerns about the prospect of increasing national insurance rates.
Following the publication of its latest Monthly Business Survey, the British Chambers of Commerce (BCC) points out that while the Treasury’s planned one per cent rise in National Insurance Contributions (NIC) on businesses would provide the government with some much needed revenue, doing so would prove to be detrimental to organisations.
Indeed, it was suggested that should the government go ahead with this particular move, businesses will be able to create less jobs in the long term.
“Companies have and will continue to play their part in creating wealth and jobs, generating economic growth and driving recovery, but the right environment needs to be in place,” David Frost, director general of the BCC, states.
As an alternative, the BCC notes that raising VAT to 18.5 per cent would not only provide a similar amount of revenue as the NIC hike in efforts to reduce the budget deficit, but prove to have a less negative impact on business accounts .
“It’s a tough call, but we have to be realistic about repairing the public finances and promoting recovery.”
Such comments as the Monthly Business Survey reveals that 22 per cent of companies questioned believe that government should focus on reducing the amount of red tape they have do deal with.
And those looking to make the most of their business bank accounts may be interested to note that 13 per cent of firms claim making Britain’s tax system should be made more competitive.
Similar sentiments were echoed in a recent study by the Forum of Private Business which noted that 45 per cent of firms see their tax burden as a being “very serious” issue.
The BCC study also indicates that 55.1 per cent of organisations think the chance of a ‘double-dip’ recession is likely, with 20.1 per cent of respondents claiming this is very likely to occur.