Welsh Small Businesses Hit With £99.4 Million Tax Bombshell

–       Cardiff and Swansea are among the worst hit areas by new tax rises.

–       The Liberal Democrats demand tax cut for small businesses in the upcoming budget

Small and medium-sized businesses across Wales, from tech start-ups to hairdressers and cafes, will pay an extra £99.4 million a year due to the rise in national insurance, research commissioned by the Liberal Democrats has found.

Boris Johnson broke his 2019 manifesto promise by raising employer National Insurance Contributions by 1.25 per cent, impacting thousands of small businesses. House of Commons Library research has detailed the impact of this tax rise on small businesses across the country. It is estimated that the average micro-business employing up to 9 people will pay more than £1,000 extra a year as a result of the tax hike.

The top 10 most impacted areas of Wales include the country’s business hubs in major cities and local authorities with a high number of small businesses, including rural regions. As well as the capital, Swansea, Carmarthenshire, Powys and Pembrokeshire are all expected to hundreds of thousands extra in tax following the broken promise.

Ahead of the budget, the Liberal Democrats are calling for small businesses to be offered a lifeline by slashing their employer’s national insurance contributions instead of raising them.

Under the party’s proposals, the Employment Allowance would be quadrupled from £4,000 to £16,000 for at least two years, meaning taxes on small businesses would be slashed by £5.5 billion next year.

Jane Dodds MS, the Leader of the Welsh Liberal Democrats commented on the findings:

“The Tories’ broken manifesto promise will create a tax bombshell for the small businesses that are the backbone of our communities. It’s little wonder that voters no longer see the Conservative party as the party of low tax.

“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.

“The Liberal Democrats want to unleash the power of small businesses to create jobs and drive our economic recovery, by giving them the tax cut they need and deserve.”

Areas in Wales hit by small business tax bombshell by local authority