The Government is being urged not to revisit shelved plans for tax increases on the self-employed.

It follows the latest Small Business Index(SBI) from the Federation of Small Businesses (FSB) showing confidence is dropping among members.

The SBI is down to +15 in Q2 2017 from +20 in Q1, marking the first fall in the index since the wake of the EU referendum.

When asked about threats to expansion plans, small firms are most likely to raise the domestic economy. More than half (52per cent) see it is a barrier to growth. Consumer demand (30per cent), labour costs (24per cent) and the tax burden (17per cent) are also commonly flagged.

Operating costs for small businesses are now at their highest in four years. A net balance of 66 per cent report increased operating costs in Q2 2017, up from 53 per cent in the same period last year.

Mike Cherry, FSB national chairman, said: "Small businesses were feeling more pessimistic even before the General Election was called. Now alongside increasing inflationary pressure, a business rates revaluation and rising labour costs, they have a whole new wave of political uncertainty to contend with.

"Clearly this is not the time to revisit failed plans for a national insurance hike on the UK's 4.8 million self-employed.

"These strivers are the engine of our economy. In this unforgiving climate, the last thing they need is increased cost. This would act as a disincentive to business creation.

"Many small firms are still reeling from the business rates revaluation that took effect in April. The £300 million hardship fund announced at the Spring Budget to help those worst effected offered a glimmer of hope, but is yet to materialise.

"With the election out of the way, there's absolutely no excuse for local authority debt collectors chasing small businesses for incorrect, over-inflated bills without the emergency relief applied. The Communities Secretary needs to make distribution of this fund his top priority."

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