Taxes on Small Businesses

Robert Courts Excerpts

Wednesday 18th October 2017 Westminster Hall

[Ms Nadine Dorries (in the Chair)]

Order. It is appropriate etiquette for any Member who wishes to speak to rise and catch my eye. Is Mr Davies the only remaining Member who wishes to speak?

[Robert Courts (Witney) (Con)]

rose—

[Ms Nadine Dorries (in the Chair)]

I call Mr Courts.

[Robert Courts (Witney) (Con)]

It is a pleasure to serve under your chairmanship, Ms Dorries. I welcome the chance to speak in this important debate, which I congratulate my hon. Friend the Member for St Ives (Derek Thomas) on securing. I declare at the outset my chairmanship of the all-party group on small and micro business, and my practice at the Bar, both of which have a clear bearing on the debate. I also refer hon. Members to my entry on the Register of Members’ Financial Interests.

There is no doubt that small businesses are the drivers of our economy—the agile, risk-taking job creators. It is no exaggeration to say that they are the very fabric of our society. That is never clearer than when I walk around my constituency of Witney and west Oxfordshire and see many hundreds of brilliant examples of small businesses that have started from scratch in small premises. As my hon. Friend the Member for Newark (Robert Jenrick) says, many of them start around a kitchen table. I recently launched the West Oxfordshire Business Awards, at which I saw some fantastic examples of such businesses. They make the importance of small business crystal clear.

It is essential that we continue to work towards a low-tax economy. I entirely concur with my hon. Friend about this Conservative Government’s attitude to support for small businesses and the low-tax economy they have fostered. I thank them for it. There is no doubt that the burdens of taxation on small businesses are significant: it is estimated that they spend about £3,600 per year and three hours per month on administering the tax burden and complying with its obligations. It is incumbent on us to reduce those obligations to as limited a level as realistically possible. The chief culprits are VAT, corporation tax, income tax and PAYE.

Making Tax Digital is a key plank of the Government’s agenda. I freely confess that when I practised at the Bar before being elected to Parliament, I did not hugely look forward to filling in my annual tax return or my quarterly VAT return, so I was not wildly enthusiastic about the prospect of doing either more frequently. Setting aside that immediate reaction, once the system has bedded in and people have got used to it, it will clearly make it easier in the long run for small businesses and microbusinesses—as well as sole traders like me—to do tax returns online and more frequently, rather than in a massive chunk at the end of the year.

I welcome Making Tax Digital, and I think its benefits need to be explained to all businesses, but I ask the Government to ensure that complying with it is not an onerous burden for small businesses. Chief among my concerns are training and software. I make a plea that the software be fully tested before digital taxation is rolled out, so that it works smoothly and unintentional difficulties are not introduced. I also applaud the amended timetable that was laid out in July; I think it was the Minister who is here today who did that. Clearly the Government have listened to some of the concerns that have been expressed by small businesses and that amendment will assist them greatly.

I welcome the national living wage and the start of auto-enrolment for pensions. Those measures have done so much under this Conservative Government to help the lowest paid in our society and to ensure that people have planned for a successful, safe and financially secure retirement; they are much to the Government’s credit. However, there is an impact upon small businesses, especially those with lower margins and those for whom the staff costs—childcare, social care and so on—are particularly high.

I ask the Government and the Minister just to consider whether they might be able to support employers further by looking at increasing the employment allowance, simply because that is something that companies tend to use to put into investment in technology, hiring more staff or raising wages. The small business community would welcome such an increase.

It would not be right for me to make a speech in this debate without mentioning business rates, which of course are a major concern to many small businesses. Again, when I walk around my constituency—including the streets of Witney, Burford and Chipping Norton—and see the wonderful small businesses that are so unique, I am reminded how important it is that we never reach a situation in which we have identikit high streets and essentially the same chains populating towns.

I thank the Government for having listened to the concerns expressed earlier this year with regard to the discretionary relief fund—the £300 million that was produced and given to local authorities. I pay tribute to my council, West Oxfordshire District Council, which is well on its way to distributing the help that has been given by central Government to local Government. I would like to make it quite clear at this stage that there is good evidence in Witney that that help has made a real difference and saved some businesses that might otherwise have been unable to cope. So, as I say, I thank the Government for that.

However, I have some concerns about the administration that is involved in any business rates system, particularly with regard to the valuation office. A constituent has been locked for four years in an unresolved dispute over the valuation of their property. The layers of bureaucracy, which are confusing enough for those of us who regularly deal with these matters on a casework basis, are particularly challenging for small businesses. I would like to see a quicker and more efficient appeal process for the purposes of business rates valuation.

I will just say a few words about the online environment, which I know the Government are working on. An incredible world exists for us now. When we are sitting here having made our speeches, we can order things online—all sorts of products from all over the world. Gone are the days of needing to visit another country to get their products; we can get their products brought here to us. That is extraordinary but there is a real issue when small businesses, such as those I have referred to, that are trading from brick and mortar premises are up against large companies that are not paying the same business rates because of their obvious lack of such a physical presence. It is very difficult to compete against those companies, and likewise against the larger multinationals or nationals who can more easily absorb the costs, the bureaucracy and of course the taxation that is involved. I know that the Government are aware of that and that they are doing something about it; I simply flag it as something that is very important for small businesses.

We must also remember that there is an element of choice for consumers, and that it is incumbent upon all of us to spread the word among our constituents about the brilliant small businesses that we have in our local area. In my constituency there is a great local bookshop in Woodstock. Well, if we want to have that shop, or the florist in Witney, we need to go in there and buy things, and not buy everything from Amazon. Those shops need to be there and we need to support them and actively make that choice. And let us not forget what such shops can give, because there is the real customer service—the care and dedication—that one gets from businesses that their owners really feel about, when they have set them up from their own kitchen table and grown and sustained them through their own blood, sweat and labour.

I will conclude by saying that as we leave the European Union we have an extraordinary opportunity to make Britain the most business-friendly environment in the world—the best place to start the small businesses that really are the lifeblood of our local economies. I am entirely confident that that British entrepreneurial spirit will ensure that we continue to thrive outside the European Union and make the most of those global opportunities that are there for the taking.

However, we all need to continue to ensure that we have the business-friendly environment that encourages and unlocks the talent that we have, which means a low-tax and low-regulation environment, to make sure that our local businesses not only continue to survive but continue to thrive. I know that is the case under this Conservative Government, and I applaud all activities in that regard and in that direction.