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Small firms say UK taxes are strangling growth

But will take on more staff anyway

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The Federation of Small Business has found that its members would happily take on more staff if they weren't groaning under the financial burden of keeping the British government ticking over.

The organisation also predicted a rise in unemployment, giving its members even more reason to rail against the taxes they will have to pay to support the people they can't give jobs to.

The organisation's latest survey found that more than half its members believed UK taxes were preventing them taking on more staff.

It was businesses in the South East that were most irked by the prospect of subsidising the state apparatus, with 64 per cent of them saying taxes had a negative impact. The figure in the North West was 60 per cent, and 59 per cent in London. The figure across the country was 58 per cent.

While a survey late last year suggested that 19 per cent of small firms would take on more staff, the organisation expects a rise in unemployment in the short term.

It called for a cut in national insurance or freeze in national insurance rates, with a rebate for small businesses to stimulate employment.

"A cut in National Insurance Contributions would encourage small businesses to take on more staff and grow their business," national chairman John Wright said.

"Small firms can help to strengthen economic recovery if they are given a chance to grow and flourish, but they will need a helping hand."

It was not clear if the FSB reckoned an NI cut would lead to its members taking on even more staff than they already planned. Its late 2009 survey showed 27 per cent of its members expected to take on workers this year, with 23 per cent in the North East planning to expand their workforce.

The lowest proportion of small firms expecting to hire more workers was Yorkshire and Humberside, where just 16 per cent expect to lengthen the payroll. ®

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