Lower earners should not have to pay income tax, the North's Federation of Small Business (FSB) has said in its budget submission published yesterday. The 14-page submission calls for personal tax allowances to be increased to curb the growth of the "informal economy", which it said flourished as a direct result of low levels of allowances.
The federation has called for an increase in income tax personal allowances to £8,500 sterling (€13,818), transferable within households.
According to FSB policy chairman Mr Wilfred Mitchell, the only practical solution was to remove lower earners from income tax altogether.
"The FSB argues that while the tax burden for small limited companies has fallen, the unincorporated business owner still faces a disproportionate tax bill.
Such an extension to the allowance would help the self employed," he said.
Published by Dr Esmond Birnie, MLA and chairman of the Assembly's Employment and Learning Committee, the submission also stated that payroll burdens were the organisation's main concern.
The submission urged the Chancellor of the Exchequer, Mr Gordon Brown, to review the regulatory burdens imposed on small businesses, which it said were the result of government delivering social policies through the employer payroll.
FSB budget spokesman Mr John Hurson said: "We are looking for the Chancellor to give further encouragement to small businesses by recognising the role they play in administering welfare payments." The FSB maintains the costs imposed on small businesses by the government delivering social policies through the employer payroll have increased dramatically since 1997 and claimed that the new Tax Credit Bill will exacerbate the situation.
"The FSB is firmly of the view that the social policies of government should not be delivered through the employer payroll," he said.
The FSB is the UK's largest lobby organisation representing the self-employed and owners of small businesses. Founded in 1974, it now has 165,000 members across all industries, trades and services.
Other proposals include a reduction in the tax on fuel, abolition of the construction industry scheme, and a method where tax payments could be made in instalments.
