Economic concerns ahead of General Election loom for UK SMEs
Ahead of the upcoming general election, over half (52%) of SME owners do not feel informed on the different political parties’ policies and their potential impact on small businesses, according to new data by online accounting provider FreeAgent.
The survey delves into small business owners’ thoughts on the UK’s economic performance as well as perceptions around the upcoming election and its potential impact on small businesses in the UK. It reveals that many entrepreneurs are pessimistic about the changes to come and how they might affect the UK’s economic output, with 2 in 5 respondents (39%) believing there will be little to no change in how the economy performs over the next 12 months, and a quarter (26%) who feel the economy will perform worse than it has over the past 12 months.
The poll also reveals that UK small business owners are not particularly optimistic about their own prospects, with nearly half (49%) expecting their businesses to continue to perform at their current levels for the next 12 months.
When asked about the top five priorities for entrepreneurs, respondents highlighted the following as key concerns for their business:
- Keeping on top of cashflow/cashflow forecasting (53%)
- Expanding into new products or revenue streams (36%)
- Reducing business overheads (35%)
- Getting paid faster (26%)
- Investing in new technology/software (18%)
The upcoming general election and the policies enacted by parties to resolve these issues will undoubtedly impact the business landscape in the coming years. Given SMEs make up 99.6% of the UK’s business population, the next government will need to address these concerns in order to not only support the small business sector but also encourage growth in the wider economy.
When asked about the forthcoming election, small business owners shared the prospective legislation they would most like to see enacted. Among the most popular were:
- Lowering of business taxes for freelancers and small businesses (70%)
- A greater crackdown on tax evasion/avoidance by multinational businesses (55%)
- Introduction of more statutory protection for self-employed (e.g. pensions, sick leave, maternity pay) (39%)
- More financial aid and/or incentives for people starting a business (33%)
- Scrapping IR35 – or ‘off-payroll’ – legislation (29%)
This shows that small businesses have specific legislative priorities that they believe are crucial for the next government to address in order to support the SME sector.
Roan Lavery, CEO and co-founder of FreeAgent said, “Our latest survey paints a fairly bleak picture for small businesses in the UK, with few SME owners showing much optimism for the state of the economy. Instead, many believe that economic growth will be unlikely for at least another year, while their own business prospects will remain equally flat – and this is a scenario that our political parties will need to address during the run-up to the General Election.
“While some of the main parties have started to release their manifestos, we have not seen much in the way of policy announcements aimed at the SME sector. So far, there have been a handful of suggestions centered around business rates and National Insurance, but far more is needed to actually help the millions of small business owners who are struggling right now.
“I hope that all parties – including whoever forms the next government – will look at the issues most impacting SME owners, including making tax easier and fairer, cracking down on tax avoidance, properly addressing the scourge of late payment and providing greater statutory protections for the self-employed. By doing so, we can help support our current generation of entrepreneurs, enable them to grow their businesses and, ultimately, revitalise the wider economy.”