There could be tax­ing times ahead for SMEs

Western Mail - - BUSINESS - JANET JONES

Last week, the Welsh Gov­ern­ment pub­lished its draft bud­get. In it were sev­eral op­por­tu­ni­ties that are ex­cit­ing and im­por­tant for the busi­ness com­mu­nity, but there are also points of con­cern.

At FSB Wales, we are pleased to wel­come pre-ex­ist­ing com­mit­ments to re­form­ing the busi­ness rates sys­tem.

This is along­side the com­mit­ments to ex­plor­ing the Swansea Metro, a third Me­nai Bridge cross­ing and im­prov­ing the A470 and A487, which are all in­fra­struc­ture devel­op­ments that will ben­e­fit those that are seek­ing to travel and raise aware­ness of their busi­ness around Wales.Re­mov­ing the tolls on the Cled­dau Bridge will also un­lock more ar­eas of South­West Wales for small busi­nesses and the self-em­ployed.

A new fund to sup­port busi­nesses through the Brexit process could be crit­i­cal in main­tain­ing and de­vel­op­ing a re­silient and vi­brant SME sec­tor in Wales fol­low­ing our exit from the Euro­pean Union.

How­ever, we are con­cerned to see that £100m will be cut from the econ­omy and in­fra­struc­ture bud­get.

While we have not yet seen the full de­part­men­tal bud­get in or­der to de­ter­mine where the money will be cut from, we are clear that any cut to the bud­get should not lead to a de­crease in busi­ness sup­port. We look for­ward to see­ing the de­part­men­tal bud­get in the com­ing weeks to en­sure that this will not be the case.

A New Bud­get for Wales has also, for the first time, in­tro­duced a con­ver­sa­tion about new taxes that the Welsh Gov­ern­ment could in­tro­duce for Wales.

There are four pro­posed new tax op­tions, only one of which will be put to the UK Gov­ern­ment in 2018. The op­tions are: A tourism tax; A dis­pos­able plas­tic tax; A va­cant land tax; and A tax to sup­port so­cial care

There has been no fur­ther de­tail from the Welsh Gov­ern­ment on what any of these taxes could look like, and at FSB Wales we look for­ward to see­ing the full out­line of each pro­posed tax from the Welsh Gov­ern­ment so that we can en­gage with the process and en­sure that the voice of small busi­nesses is heard loud and clear in the de­bate on new taxes for Wales.

On the face of it, a tourism tax should be ap­proached with cau­tion. As many as 98% of tourism busi­nesses are SMEs and they have the high­est rate of busi­ness clo­sure (at 11.9%) of any pri­or­ity sec­tor.

This is cou­pled with the fact that tourism busi­nesses tend to be con­cen­trated in ar­eas that are less di­verse eco­nom­i­cally, such as Gwynedd, Ceredi­gion and Pem­brokeshire. So tax­ing this ma­jor lo­cal econ­omy could cause sig­nif­i­cant un­cer­tainty own­ers.

The data around the amount of SMEs en­gaged in tourism also demon­strates how this tax could dis­pro­por­tion­ately im­pact upon small busi­nesses across Wales.

FSB Wales would be very con­cerned about any tax that would dis­pro­por­tion­ately im­pact upon small busi­nesses in this way, and the mes­sage this sends from the Welsh Gov­ern­ment to busi­ness.

This is all in the con­text of around 11 mil­lion peo­ple vis­it­ing Wales an­nu­ally, 10 mil­lion of whom are from the rest of the UK. This leads to about 35 mil­lion nights stayed in Welsh ho­tels, hos­tels and B&Bs.

We must look closely at the kind of mes­sage we are go­ing to send to tourists look­ing to spend a night in Wales.

Ul­ti­mately, the main is­sue with all of the taxes pro­posed is that we do not yet know the de­tail in or­der to en­gage fully with the Welsh Gov­ern­ment, which is some­thing we look for­ward to do­ing in the near fu­ture.

Janet Jones is pol­icy chair of FSB Wales. for tourism busi­ness

Richard Swingler

> A ‘tourism tax’ is one of a num­ber of op­tions be­ing mooted by the Welsh Gov­ern­ment in its draft bud­get

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