The self-employed should be better supported by the Government and eligible for tax breaks including a three year freeze on paying taxes along with grants and holiday pay, according to experts.
Micro-business experts have called on the Business Secretary Kemi Badenoch to introduce a raft of new measures to help support micro business – defined as those with less than ten staff.
There were more than 135,000 one-person businesses in the UK in 2022, the most recent figures available.
In addition to this there were more than 780,000 businesses of two to four people each meaning well over a million people were employed in these tiny enterprises.
A further 270,000 companies operated with teams of five to nine people, taking the total number of micro-businesses to 1,185,000.
Collectively those businesses turned over a massive £820 billion in 2022 and paid hundreds of millions of pounds worth of taxes to the UK Treasury.
Yet the past few years have been difficult for tiny businesses with record numbers going to the wall. The sector shrank by £133 billion in 2022 down from a peak of £953 billion in 2021, and while figures for 2022 are not yet available, a further contraction is expected in this period.
Now micro-business experts at freelance specialists Suited Insure are calling on Business secretary Kemi Badenoch to make life easier for tiny enterprises by introducing a series of tax breaks and other measures to encourage more people to become self-employed.
The measures include allowing micro businesses to trade without paying any National Insurance, tax or VAT for three years to help them rebound the economy.
They are also calling for business grants to be made freely available for anyone who wants to start a company with more money available to employ staff.
The experts are also calling on the Government to pay holiday pay to the self-employed to enable them to take paid annual leave from day one.
They also want Kemi Badenoch to look into the possibility of offering free child care places to the self-employed and those they employ, to bring rights to other benefits such as maternity and paternity leave and compassionate leave, in line with other workers.
Jana Kejvalova, of Suited Insure, said: “Britain’s army of micro-business owners are unsung heroes keeping the UK economy going.
“They work incredibly long hours and have to deal with a mountain of stresses which salaried workers simply don’t face.
“Many work for months or even years without so much as a single day off let alone a paid holiday. This impacts their mental health at a time when the whole economy is struggling with inflation and the cost of living crisis.
“Yet despite their hard work in getting businesses off the ground and often creating jobs for others, they don’t often enjoy far fewer rewards than those in jobs.
“The pandemic has led to a shrinking of the sector and increasing numbers of micro business owners and those who work for them, are choosing to take jobs elsewhere or simply go on to benefits.
“We believe the government should be doing more to support these hard working people and to encourage others to take the plunge and become self employed.
“That’s why we are calling for a freeze on all National Insurance contributions from micro businesses for the next three years along with a freeze in taxation and a holiday from VAT.
“We also want more benefits such as free child care places, sick pay and paid holiday, maternity and paternity pay and compassionate leave from day one of starting a business.
“We believe these measures will help support Britain’s micro businesses and not only prevent the sector from further contraction but actually spark a growth in the number of people starting their own business.
“We believe these measures are entirely reasonable and well deserved by the more than 1m micro businesses in the UK.”
Read more:
Calls for Government tax breaks for micro businesses