Small businesses have called on the Government to slash employer National Insurance contributions as firms face rising costs and labour shortage challenges.
Just under two thirds (64 per cent) of respondents to the quarterly Full Small Business Index (SBI) report, said their operating costs had risen over the past year.
The Federation of Small Businesses (FSB) called on ministers to urgently cut employer National Insurance contributions to “unlock growth” or otherwise risk economic recovery.
Four in ten (43 per cent) of the 1,500 respondents said raw materials had pushed up costs while labour (36 per cent) and utilities (28 per cent) had also increased.
Construction bosses reported skills shortages had been a big challenge, with 70 per cent struggling to hire.
Skills shortages were also concerning for the professional, scientific and technical and information & communication industries.
Exporters reported difficulties with more than half (53 per cent) having had goods held indefinitely at EU border crossings since April while a similar proportion (45%) had lost goods in transit.
Of small exporters surveyed, 23 per cent said they had temporarily or permanently stopped selling into the EU while 21 per cent were mulling halting sales.
The FSB urged the government to relaunch the now closed SME Brexit Support Fund to help exporters “firing on all cylinders again”.
FSB national chairman Mike Cherry said: “Small firms are emerging from lockdowns under the strain of spiralling input and shipping costs, skills shortages, new exporting paperwork, emergency debt repayments, rent accruals and business rates.
“The Government should urgently move to mitigate cost pressures by reducing Employer NICs, which are serving as a jobs tax and yet another cost to think about in an environment where finding the right people is a nightmare.”