The Federation of Small Business urge ministers to 'Steady Economic Ship'

In a report published today, the Federation of Small Business (FSB) found that three fifths of businesses don't want the government to change income taxation, with two thirds believing it would be detrimental to the economy. 

The survey conducted this November on 315 Businesses in Scotland, found that 20.7% wanted a decrease in taxation and 21.0% would welcome an increase. 

The poll comes just before the draft budget is announced on Thursday. FBS have written to Cabinet Secretary Derek Mackay with the results, asking for a 'steady economic ship' in times of uncertainty. 

The First Minister has spoken about taxation increases to fund public spending in the last few months, the extent of which will be revealed in Thursday's budget.

Andy Willox, FSB’s Scottish policy convenor, said: “A clear majority of those that run their own business in Scotland don’t want the Finance Secretary to increase income tax rates. Those asked warned of the impact on the wider economy, and little wonder with pressure on household incomes and uncertainties about the impact of Brexit.”

The research from FSB also showed that 68% of businesses are on the basic tax rate, meaning they earn between £11,501 and £43,000.

The government's four alternative approaches include having anything up to six tax bands, while three out of the four feature a 50p additional rate and incremental changes to the basic and higher rates.

The FSB survey found that just under half of business owners preferred the proposal with the largest number of bands and rates.

Andy Wilcox added: “This data scotches the myth that business owners are all high earners. Further, when forced to choose between Ministers’ palette of tax options, the largest share of business owners chose what could be regarded as the more progressive option.

“They seem to be less worried about their own wallets and more concerned about the wider economy.

“That’s why, overall, smaller businesses don’t want to see tax change. As FSB warned ahead of the UK Budget, trading conditions are already turbulent, and additional tax hikes – for them or their customers – are not what we need right now. The Scottish Government must resist the siren song of a big change budget, and do what they can to steady Scotland’s economic ship.”

Source: FBS Scotland