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Businesses call for immediate emergency budget

The British Chamber of Commerce has called for an immediate emergency budget to address the cost crises facing businesses in Britain.

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The British Chamber of Commerce has called for an immediate emergency budget to address the cost crises facing businesses in Britain.

It has developed a three-point action plan that will enable businesses to keep a lid on rising prices, increase productivity and alleviate cost pressures.

  • Postpone the recent national insurance increase to at least 2023/24
  • Cut VAT on energy bills from 20 percent to 5 percent for a minimum of one year, helping firms manage the impact of runaway energy prices
  • Repairing free Covid tests for companies eases the pressure on productivity caused by persistently high absenteeism combined with labor shortages

In summary, these three steps in an emergency budget will remove the pressure of businesses struggling to keep the economy afloat, according to the BCC – which provides a route to higher productivity and future tax receipts.

> See also: A third of businesses are expected to raise prices in May

The Bank of England warned last week that the UK economy would fall into a recession this year as higher energy prices pushed inflation above 10 per cent.

Sunak should not wait until the fall to intervene, when his next budget is expected, said Shevaun Haviland, director general of the BCC. Financial Times. He now has to draw up an emergency budget before more businesses go under.

“It’s easier to keep a business open than to have it reopened once it’s closed,” she told the newspaper.

> See also: Independent stores ‘open’ for idea of ​​online sales tax

The postponement of the increase in national insurance contributions (NICs) will not only alleviate the immediate pressure on companies’ balance sheets, but it will also put money back in the pockets of employees, according to the BCC – which boosts consumer confidence. the economy will then be in a much stronger position to bear the increase when supply chain has disrupted disruption and global factors affecting inflation have declined.

Reducing VAT on business energy bills to 5 percent for all businesses will provide another quick release valve to increase the cost to businesses.

For example: a small business that has an energy bill of £ 10,000 and currently pays the standard 20 percent rate will pay £ 2,000 VAT. The BCC’s proposal would reduce it to £ 500.

And many businesses in the UK are still seeing above-average absenteeism rates as Covid continues to affect the workforce. About two-thirds of more than 1,100 businesses surveyed by the BCC in April reported staff absenteeism due to Covid symptoms or self-isolation. New sub-variants of Omicron apparently lead to rising infection rates in the USA and South Africa. By bringing back free trials, businesses will limit the spread of the disease among employees.

Shevaun Haviland, Director-General of the British Chamber of Commerce

Haviland said: “These are simple, straightforward measures that can be quickly reversed when the economy is in a better state.

“During the pandemic, the treasury and HMRC proved their ability to implement similar changes quickly and efficiently. Making these changes will have an immediate benefit for both businesses and the public.

“The cost crises that businesses and people in the street face are two sides of the same coin. If we can ease the pressure on businesses, they can keep a lid on the price increases that are being driven by rising energy bills, staff shortages and higher taxes. ”

Shevaun Haviland, Director-General of the BCC, will answer your questions in a live Twitter V&A on Thursday 19 May at 16:00. Ask Shevaun your questions using the hashtag #askshevaunhaviland, but remember to follow @smallbusinessuk to participate

Further reading

Sunak announces new ‘fraud group’ to target Covid losses

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