SMEs Sign “no NIC rise” Petition

SMEs Sign “no NIC rise” Petition

Business groups have called on small firms to sign an online petition demanding that the Government scraps its planned National Insurance Contributions (NICs) rise in April 2011.

As part of its efforts to shrink the large public spending deficit, the Government intends to raise NICs by 1 percentage point in April 2011.

But the decision has angered business leaders who see it as a “tax on jobs”, which could jeopardise an upturn in the labour market by discouraging businesses from taking on new staff.

The British Chambers of Commerce, the Federation of Small Businesses (FSB), the Confederation of British Industry and the Chartered Institute of Personnel and Development (CIPD) are among the organisations all opposed to the increase.

“We urge the Government to work with business groups to find alternative ways to close the UK’s budget deficit ― beginning with a credible plan to reduce inefficiency in public sector spending,”

the groups’ petition reads.

“Any Government has to realise that additional taxes on businesses, especially small-and medium-sized companies, must be a last resort, not an easy way forward.”

FSB national chairman, John Wright, said that the Government needed to take “real action” to tackle unemployment, rather than increase NICs contributions which he said could cost the country “thousands of jobs”. The FSB also said that the move could lead to a loss of 57,000 jobs across the UK.

According to the CIPD, 12% of employers intend to recruit fewer staff because of the hike in NI rates.

However, HM Treasury spokesman, Jonathan Tutton, said that the Government had set out a clear plan to halve the deficit over four years and that “tough choices” had to be made.

“As part of this, National Insurance will rise by one percent from April 2011 which will raise £3 billion a year from 2011 to 2012 and go towards consolidating the public finances.”

“Those on modest incomes will be protected, by raising the starting point at which national insurance is payable. As a result no-one earning under £20,000 will pay any more NICs.”

To access the petition, visit the No NICs Rise website

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