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Taxation: Small and Medium-sized Enterprises
03 February 2026
Lead MP
Gregory Stafford
Farnham and Bordon
Con
Responding Minister
Dan Tomlinson
Tags
Crime & Law EnforcementEconomyTaxation
Word Count: 4661
Other Contributors: 6
At a Glance
Gregory Stafford raised concerns about taxation: small and medium-sized enterprises in Westminster Hall. A government minister responded.
Key Requests to Government:
The Government should abolish business rates for businesses with bills under £110,000 and consider a reduced VAT rate of 12.5% for hospitality to support growth and improve competitiveness.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
SMEs are struggling with higher taxes, soaring energy bills, and rising financial costs. Research shows that two in five SMEs do not know if they were profitable last month. The hospitality sector faces a significant increase in business rates, with the average pub seeing its rates rise by 15% in the first year and climbing to 76% by year three.
Dan Tomlinson
Con
Stockton South
Defended the Government's approach on VAT thresholds and business rates reforms, noting that they had implemented transitional relief measures for businesses affected by changes. Confirmed that three quarters of businesses affected by recent changes in business rates will either see a reduction or no change this year, with rates frozen for two years; announced a review of the methodology used to assess pubs and hotels.
Gregory Stafford
Con
Farnham and Bordon
Stated that the statistics about pubs mentioned are now outdated due to last year's changes; three quarters of pubs, live music venues will see their business rates fall or stay the same.
Jim Shannon
DUP
Strangford
The number of small uplifts in rates, national insurance contributions, and the price of goods cannot be absorbed by knife-edge profit margins. Stopping tax rises is crucial to prevent a deadly impact on the local economy.
Inverness, Skye and West Ross-shire
The hon. Member proposed an inquiry into whether Amazon's undertaxation is contributing to high street closures, suggesting that online providers should have equitable tax treatment compared to physical retailers. Called for an increase in the VAT threshold to £250,000, which would lead to significant employment gains and additional tax revenue.
Peter Fortune
Con
Bromley and Biggin Hill
SMEs in Bromley are facing restrictions due to Government policies, including the jobs tax. Abolishing business rates would give small businesses a boost. The hon. Member highlighted the adverse effects of government policy on charitable institutions in his constituency, noting that such policies are indirectly taxing the NHS by affecting suppliers and care homes.
Rachael Maskell
Lab/Co-op
York Central
In York, there is an average increase in business rates of 35% compared to the national average of 19.4%. A profit-related tax or turnover tax could bring more revenue and cost small businesses less. Expressed concerns about small businesses not receiving adequate support and requested a meeting to discuss potential mitigation strategies.
Government Response
Dan Tomlinson
The Exchequer Secretary to the Treasury
Government Response
The hon. Member for Farnham and Bordon’s concerns were acknowledged by highlighting six interest rate cuts since the Government took office, resulting in lower borrowing costs for businesses and improved living standards. The Minister noted that economic growth has outperformed forecasts, with wages increasing faster than under previous administrations. Defended the Government's approach on VAT thresholds and business rates reforms, noting that they had implemented transitional relief measures for businesses affected by changes. Emphasised that significant reforms were introduced to create a wedge between large online retailers and high street businesses in terms of tax rates. Responded to concerns about business rate increases, noting that 15% relief will apply in cases where rates are expected to increase; announced a high streets strategy involving cross-Government departments to support businesses struggling with shoplifting and other issues.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.