MONDAY heralded the arrival of changes to the business environment, which will increase the cost and complexity of running an enterprise in the UK.

Firstly, two million small businesses have been hit with new reporting requirements due to the Government’s Making Tax Digital (MTD) programme. The software required to meet MTD obligations alone is set to cost small firms £564 each on average.

Secondly, up to 500,000 firms are facing fresh business rates hikes as the third year of the revaluation period starts. It means that thousands of firms will lose transitional caps on their rising bills

Thirdly, more than a million small employers will have to deal with a further increase in auto-enrolment pension contributions. The minimum total contribution to such schemes will rise to eight per cent of an employee’s qualifying earnings, up from five per cent last year. Employers will be required to shoulder three per cent of the contribution.

These changes are taking effect at a time when our research shows that small business confidence is at rock bottom. In fact it has now been in negative territory for three last three quarters – the first time this has occurred in the nine years we have been measuring confidence levels. In addition, our most-recent Impact of Government Policy Index shows policy interventions have caused costs to increase for small VAT-registered firms by £60,000 each on average since 2011.

It’s hardly surprising then, that for the first time since 2010, we saw a contraction in the size of the UK business community last year.

All Ministers and policymakers need to take note and do everything they can to avoid exacerbating this loss in 2019.

The Federation of Small Businesses is therefore calling on government to support businesses that are most impacted by these additional burdens and to rule out the introduction of any additional ones.

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