Escalating costs continue to be a matter pressing on the minds of individuals and businesses alike. However, while the former has now received some much-needed help with their energy bills from Chancellor of the Exchequer Rishi Sunak, many representatives of small-to-medium-sized enterprises (SMEs) have asked when targeted support will be coming to aid their own survival.
Policies needed to “cut costs, minimise red tape and accelerate growth”
Amid the sustained cost-of-living crisis, those keeping even the most casual eye on the recent headlines will probably be aware of the Chancellor’s announcement of help that could see some of the UK’s most vulnerable households receive £1,500 over the course of the year. That will include a £400 grant in the autumn for most of the country’s population.
However, the absence of support targeted at small businesses made for quite the contrast; there was no news of any grants to encourage investment, for example or any increase to the employment allowance.
So, while UKHospitality CEO Kate Nicholls welcomed confirmation of the £15 billion package as a “signal that the government is targeting inflation,” she added that “now we need a commensurate focus to reduce the costs of doing business and further price rises.
“The government needs to identify and accelerate policies that will cut costs, minimise red tape and accelerate growth.”
One possible move suggested by Nicholls – but also pushed by other observers in the UK industry – has been a further reduction in business taxes to incentivise high-street investment.
The fears of consumers are not divorced from those of businesses
Meanwhile, the managing director of an insolvency specialist and business consultancy quoted by Startups.co.uk, Rick Smith, pointed out that “in total, SMEs contribute more than £2.3 trillion to the economy in general, and despite this, they are being truly left behind.”
Smith also highlighted the interconnection between consumer costs concerns and business costs concerns, commenting: “Small businesses are also feeling the effects of rising prices, just in different ways. Ultimately, prices will be passed onto consumers.”
Also expressing his deep worry about the situation was Richard Osborne, the founder and CEO of UK Business Forums. As a representative of one of the UK’s most active small business communities, he is better placed than most to know exactly what conditions small firms across the country are dealing with, and his prognosis for the UK economy was not optimistic.
He commented: “The cost-of-living crisis is a desperate situation for both businesses and huge swathes of our society, yet the government announcement seemed to ignore the reality and severity of what thousands of small business owners are going through every single day.”
Osborne urged the Government to cancel the recently implemented increase in National Insurance contributions (NICs) but admitted that even this move wouldn’t “make a huge dent”. And he said that while some help would be provided by the drop in the basic income tax rate, “that’s not for another two years.”
Osborne concluded: “Businesses need help now, and without it, there’s no question that thousands will fold long before this comes into force.”
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There is no doubt that current conditions remain challenging for UK businesses. With many sectors having only recently begun to gain some momentum in their recoveries after lifting previous coronavirus restrictions, the mere survival – never mind growth – of great numbers of SMEs is in question.
Because of this, it could scarcely be more important to consider how your own business could benefit from expert accounting services in Plymouth, Wellington or Newton Abbot, of the kind that specialists like TS Partners can provide.
For a more in-depth conversation with our experts about the tax, accounting and support solutions we could provide to assist your business at this testing time, please do not wait any longer to get in touch with us via phone or email.