Today's news round takes a look at what SMEs want from the Budget announcement... we look at taxes, broadband, funding, fuel duties, business rates and flood defences...
KPMG head of small business accounting Bivek Sharma says: “Small businesses would like to see George Osborne announce measures to reduce the cost of property for small and micro-businesses by providing tax breaks for shared workspace providers, and support affordable skills for the modern workplace through better apprenticeships and training, especially for emerging sectors.
Ashfords LLP partner and head of the corporate and commercial teams Andrew Betteridge says: “Businesses will expect greater certainty about future tax liabilities, which should encourage investment. The Chancellor can do this by delivering the business tax roadmap promised in last year’s summer Budget.”
ContactEngine CEO Dr Mark k Smith said: “The Government’s stifling VAT cliff is outrageous, unfair and needs to change in the next Budget. Once you reach £1.6 million in revenues, you go from paying VAT on receipt of payment to the moment you invoice – meaning you pay your taxes before the money is in the bank.
“I’d like to see the Government move away from the cliff model and place all businesses on cash VAT accounting. This would have the dual effect of easing the cash-flow pressure facing all successful businesses around the country whilst particularly helping small businesses who are often already disadvantaged by lengthy client payment terms."
First Data Merchant Solutions general manager Raj Sond said: “Tax doesn’t have to be taxing – or so the saying goes. The reality, for many UK SMEs is very different. In a recent survey we ran, 25% said that tracking and managing finances is the area of business that they have found more challenging than expected. With changes to business rates and the National Living Wage to content with, many small businesses are already struggling to keep on top of the wave of admin that – all too often – stifles business growth. SMEs are already pulling their weight, and more, to support the UK’s economy. The overarching plea from SMEs this year, is to ‘keep it simple’”.
Growth Street CEO James Sherwin-Smith said: “All the signs indicate that this will be a tax raising Budget but the Chancellor would be ill advised to increase the tax burden on SMEs at this time, especially when they have been one of the main drivers in the country’s continued economic recovery.
KPMG head of small business accounting Bivek Sharma says: "They would also like to see better access to funding for start-ups (less than 3 years old), whose cash flows may be affected by the administrative burden of auto-enrolment, the new digital tax system and changes to dividend allowances in 2016.
Ashfords LLP partner and head of the corporate and commercial teams Andrew Betteridge says: “The Enterprise Investment Scheme and Venture Capital Trusts have encouraged investment in smaller companies. While businesses seeking investment would welcome an increase in the income tax reliefs provided, the chancellor may choose to leave them as they are, given the continued popularity of these schemes and current constraints on public finances.”
Growth Street CEO James Sherwin-Smith said: “It is vital that the Chancellor puts small businesses at the heart of his Budget on Wednesday to ensure they continue to flourish. Accessing appropriate finance on suitable terms continues to be a huge problem for SMEs and the Government can do more to remove unnecessarily bureaucratic hurdles. There has been some indication that the mandatory SBEEA (2015) bank referral scheme will be delayed until later this year. This, frankly is a huge mistake and will only deepen the misery of small business owners seeking suitable finance, especially when the CMA has also just announced that it is elongating the timetable to conclude its inquiry and proposed remedies to resolve the identified adverse effects on competition that prevail in SME banking markets.
“While the volume of available finance is extremely important to SMEs, Growth Street also calls on the Chancellor to remember that the quality of finance is as important, if not more so. Transparency in the SME finance sector remains low, meaning that many small firms have little clarity over the true cost of the financial solution they obtain. Growth Street has launched the #APR4SMEs campaign to combat this growing problem and have made a submission to the Treasury ahead of the Budget to ensure that all financial products targeted at SMEs carry an APR. This single measure would result in a fairer, lower cost, transparent and more competitive market for SMEs seeking commercial finance, with a positive impact on growth and job creation.”
KPMG head of small business accounting Bivek Sharma says: Small businesses will also be watching for any announcements around ensuring faster broadband speeds for rural businesses in all UK regions as a priority, and a reduction in business rates for small and micro-businesses to enable these firms to be more competitive and set more ambitious Government SME procurement targets; 25% is very small when the vast majority of British businesses fall into this category.”
All SNP MPs have given their full public backing to FairFuelUK's call to stop any rise in Fuel Duty in tommorow's Budget.
FairFuelUK campaigner and TV Motoring Journalist Quentin Wilson said: "Raising fuel duty on Wednesday carries a huge political risk. As well as looking like an opportunistic tax grab, the Chancellor faces a sizeable MP rebellion - the SNP have just pledged support for FairFuel. This could defeat the Finance Bill. Tread carefully Chancellor"
FairFuelUK Campaign founder Howard Cox said: "On the eve of the Budget, the pressure on the Chancellor from MPs from all Parties to at least freeze fuel duty is mounting, including a rapidly growing group from his own back benches. The numbers are stacking up fast to defeat any duty rise in a post Budget Finance Bill. We've been told by a very Senior MP close to the Cabinet that our campaigning is working and to keep it up. Any increase will precipitate the mother of all campaign battles to bring back economic sanity to an out of touch Chancellor."
Small and medium business are eagerly anticipating the planned reforms to the business rates tax system when the Chancellor delivers the Budget this Wednesday.
New research from Sage shows that more than a third of the UK’s small businesses say that reforming business rates would have the biggest impact in transforming their businesses. Tacking late payments came in second – pinpointed by 23% of respondents as the biggest barrier to achieving their full potential.
Business rates based on property rental value rather than a commercial venture’s turnover were written in the Poor Law of 1601. Many entrepreneurs feel that they are not fit for the digital age, which has taxed retailers with physical presences more heavily than online retailers.
Ashfords LLP partner and head of the corporate and commercial teams Andrew Betteridge says: “Business leaders will hope for a reform of business rates, which can discourage investment in plant and machinery.”
Sage Europe president Brendan Flattery says: “Small businesses have been unequivocal that business rates are their top concern and they will be watching the budget closely. They won’t be happy with tinkering round the edges and will want to see the radical reform of a Shakespearean system that has been overtaken by the digital age.”
Sungard Availability Services EVP global sales and customer services management Keith Tilley said: “In this upcoming budget we would hope to see the government announce a coherent and consistent strategy when it comes to dealing with floods, and other extreme weather conditions, that create disruptions to productivity and livelihoods across all business sectors.
“While businesses now have to contend with increased threats of a digital nature, including cyber attacks and distributed denial of service outages, many remain at risk from a less sophisticated or predictable source, the British weather. One only has to look at the widespread devastation caused by the floods in the North of England and Scottish Borders of last year, or the Somerset levels of the previous year to understand just how many UK regions are at the mercy of the elements. All events which had serious consequences for businesses, not just householders.
“In today’s connected world, not only are affected businesses likely to part of a wider national or international set-up, their customers, partners and supply-chain expect instantaneous responses – no matter what the local situation is. If even one part of an organisation’s ability to deliver as expected is hindered by the impact of weather extremes, it could end up adding lost custom, lost business relationships and lost opportunities to its list of woes. All of which can take months, or even years, to re-establish.
“The government has been previously criticised for its lack of direction when it comes to dealing with extreme weather, with discussions calling for more responsibility to be taken. But it’s actually a two way process. Whilst the public sector may need to focus more on flood defences, particularly in rural areas, businesses need to identify the measures they can take to improve their resilience to weather extremes too. Fortunately modern technologies and working practices can help. Applying new mobile working tools and business recovery processes can keep firms productive and are faster solutions to implement, than the speed at which we can build new flood defences. So action needs to be taken by both public and private sector alike to keep UK businesses resilient and productive, whatever our weather.”