Home   News   Article

Lib Dems warn of '£2.5 million tax bombshell' for small businesses in far north


By Alan Hendry

Easier access to your trusted, local news. Subscribe to a digital package and support local news publishing.



Click here to sign up to our free newsletters!
Local MP Jamie Stone: 'The last thing businesses need right now are damaging tax rises.'
Local MP Jamie Stone: 'The last thing businesses need right now are damaging tax rises.'

Small and medium-sized businesses in Caithness, Sutherland and Easter Ross will pay an extra £2.5 million a year due to the rise in national insurance, according to research commissioned by the Liberal Democrats.

Ahead of this week's budget, the party called for small businesses to be offered a lifeline by having their employer’s national insurance contributions slashed instead of raised.

Prime Minister Boris Johnson broke a 2019 manifesto pledge by raising employer national insurance contributions by 1.25 per cent from April 2022, raising £12 billion a year for the NHS and social care. He said he had been forced to break the promise, partly because of Covid-19, pointing out that the "global pandemic was in no-one's manifesto".

House of Commons Library research has highlighted the impact of the tax rise, and it is estimated that the average micro-business employing up to nine people will pay more than £1000 extra a year as a result.

The Lib Dems say that small businesses in the far north will face an extra £2.5 million national insurance rise a year once the measures come into place.

Under the party’s proposals, the Employment Allowance would be quadrupled from £4000 to £16,000 for at least two years, meaning taxes on small businesses would be cut by £5.5 billion across the country next year.

Jamie Stone, the Liberal Democrat MP for Caithness, Sutherland and Easter Ross, said: “The government's broken manifesto promise will create a £2.5 million tax bombshell for small businesses in our communities.

“Small businesses have been hit hard by the pandemic and local high streets have been struggling for years. The last thing businesses in Caithness, Sutherland and Easter Ross need right now are damaging tax rises.

"Highland Liberal Democrats are calling for a tax cut for local entrepreneurs and business owners, to help them create jobs and drive our economic recovery.”

Christine Jardine, the Lib Dem spokesperson for the Treasury, said: “We have already lost far too many treasured shops from our high streets, and too many businesses are drowning in tax rises and red tape.

“Rishi Sunak must give small businesses the chance to grow again instead of clobbering them with a crippling tax rise.

“The Chancellor is out of touch with small businesses and, if he truly cared about their survival, he would cancel this tax hike immediately.”


Do you want to respond to this article? If so, click here to submit your thoughts and they may be published in print.



This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies - Learn More