Shadow Treasury spokesman, Mark Prisk, Conservative MP for Hertford and Stortford, used the Queen's Speech debate in Parliament to make the case against unjust regulations and the complex tax system relating to small businesses.
Mr Prisk has been an active spokesman on behalf of freelancers and small businesses and is also treasurer of the all party small business group, the largest all-party group in Parliament.
Mr Prisk told the House of Commons: “There are 3.8 million small businesses in the UK and 3.6 million people are self-employed. Those distinct but overlapping groups represent the backbone of our economy. After all, they employ more than half the private sector work force and they generate much of the wealth that enables us to afford the public services that we debate in this place. They are also often the most entrepreneurial and innovative enterprises in our economy.”
Struggling
Mr Prisk went on to explain that he was personally aware of the burdens that regulation and the tax system placed on small businesses.
He said: "As a former freelancer, and having met many of the small business organisations in my constituency, it is clear to me that entrepreneurs are struggling. They tell me that they are struggling for two main reasons: the burden of regulation and the burden of the tax system. It is evident that both the volume and scope of regulation has worsened over the past seven years. We know that there are 15 new regulations every working day - a 53 per cent. increase since 1997. In absolute terms, the number is between 3,500 and 4,000 in any one year.”
This year's Finance Bill contained 310 clauses and more than 500 pages of new tax rules and regulations. It is a symptom of a Chancellor who, frankly, cannot help meddling, interfering and tinkering. Every year we have a raft of new rates, thresholds and rules."
Dividend tax
Mr Prisk offered the Government's U-turn on the zero corporation tax as an example of the Chancellor's meddling in issues which direct affect small businesses.
He explained: "In 2002, the Chancellor introduced a zero rate of corporation tax on the first £10,000 of profits - apparently a very good idea, although the Government had not looked at it carefully. Of course it created a significant tax advantage for small firms to incorporate.
Indeed, as I recall, the Paymaster General told us that this was a 'gift horse, which small businesses should not look at in the mouth'. That was the exact quote; I apologise for the English. However, the result, of which the Government had been warned, was a massive 43 per cent. increase in incorporations in the first 12 months. That was far more than the Government had expected, so suddenly they realised that they were losing more than £1 billion, as I understand it, in tax revenue that they had not accounted for.”
IR35
IR35 is a crude attack on freelancers and the self employed
MP - Mark Prisk
He also cited IR35 as another 'farce' affecting small businesses. He said: "IR35 is a crude attack on freelancers and the self-employed. The regulations create barriers to work, especially in information technology. Even worse than that, however, despite being warned at the start that they would cost the Government £900 million and that they must act immediately, we discover three years on that, of the 500 cases that the Inland Revenue brought to challenge that apparently pernicious threat, it has won fewer than two - a woeful record. It has created enormous uncertainty for thousands of entrepreneurs and enormous legal bills for taxpayers.
In conclusion, small businesses do not want the Chancellor interfering and meddling. They want smaller government. They are fed up with being unpaid tax collectors and unpaid benefit officers for the benefit of the Government."
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