Small businesses hit with £2.4bn tax bombshell after Conservative broken promise


Small and medium-sized businesses, from tech startups to hairdressers and cafes, will pay an extra £2.4bn 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%, 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 most impacted areas of the country include Glasgow (8th) and Edinburgh (13th). They are all expected to pay tens of millions 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.

Edinburgh West MP and Liberal Democrat spokesperson for the Treasury, Christine Jardine commented on the findings:

 “The Tories’ broken manifesto promise will create a tax bombshell for the small Scottish 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.”


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