Brown taken to task over tax credit promise

An announcement made by Chancellor Gordon Brown at last year's Budget relating to working tax credit still has no timetable for implementation according to Britain's biggest small business organisation.

The criticism comes in a Budget submission from the Federation of Small Businesses which takes the Treasury to task for failing to act on last year's Budget speech in which Chancellor Gordon Brown said that the working tax credit should be paid direct to claimants by the Inland Revenue rather than by employers.

Administering benefit payments such as tax credits and Statutory Maternity Pay places a huge burden on small businesses which, unlike most large firms, do not have separate payroll departments.

Neil Hamper, FSB Tax Chairman said: "At the last Budget, the Chancellor said that he accepted the case for the Inland Revenue paying the working tax credit directly to claimants. But almost one year on we still have no idea when this change will take place.

"The FSB is taking the Chancellor to task because the state, not employers, should pay benefits. Not only has the government let employers down by failing to act, it has also disappointed employees, many of whom object to their boss knowing personal details about them such as their family income."

In its budget submission the FSB also calls on the Chancellor to:

• Take back responsibility for paying Statutory Maternity Pay so that it is paid directly to mothers by the government
  
• Listen to its own think-tank, the Institute of Public Policy Research, and overhaul inheritance tax so that no tax is paid on estates worth less than £350,000
  
• Ensure that measures to improve access to public sector contracts for small businesses are not undermined by the government drive to cut costs and rationalise its supplier base.