By Ivan McKeever, CEO of SwitchMyBusiness.com
So, the Budget is over and the dust has settled. But will the announcements bring any noticeable benefits to small businesses? And what does it signify for the election and potential changes to come?
While the Budget could be construed as a bit of a mixed bag for small businesses, there was some cheer to be had with Corporation tax to be cut to 20% from April and the self-employed no longer having to pay Class 2 National Insurance contributions. For businesses employing staff under 21 years old, the burden of paying National Insurance on their earnings has been removed and in a move to simplify the tax returns system, the Chancellor announced an abolition of self-assessment tax returns with a digital system that will replace them.
The Chancellor also launched a review of business rates - albeit the timing of it a little suspicious - as business rates is likely to be a hot topic in the run up to the election.
Every day, small retailers are shutting their shops because of the burden of business rates; this is not news. Yet, we’re still miles away from a solution to the problem. A business rate review that asks more questions than offers answers is not a step forward on the issue, in fact it’s an insult.
We hear David Cameron repeatedly saying small businesses are the backbone of the economy and have been the key to the country’s economic recovery, but what is he really going to do about supporting small businesses in a way that helps their pockets? When is he really going to start listening? As we enter election season, politicians will have to do a lot more to convince small businesses that they will really fight their corner.
What to look out for in the run-up to the election
So what exactly should you be looking for from the various political parties in the coming weeks? Perhaps a recent survey conducted by SwitchMyBusiness.com can shed some light on it. It found that the biggest struggles small businesses have are: a lack of government funding and grants; cash-flow problems as a result of being paid late as well as struggles with business rates. So as the politicians start begging for our vote, ask yourself the following questions:
• How are they tackling the issue of late payments to SMEs and what is their stance on it?
• What are their plans to bring more funding and grants to the small business community to enable them to survive and grow their businesses?
• Are they pledging an increase in tax-free allowances for small businesses?
• And crucially, where do they stand on business rates for small businesses? What are they going to do about reducing them? And what is their commitment to the business rate review which was recently announced?
It’s these topics which are key concerns for small businesses and ones that any new government must tackle with more vigour.
Yes, the current government may have announced the expansion of the Seed Enterprise Investment Schemes (SEIS) in the Budget, which is a step in the right direction, but it’s hardly the silver bullet small businesses were hoping for.
Our own research has shown that small businesses actually want to see the introduction of a scheme - not too dissimilar to that of the student loans - where businesses are given very favorable loan rates and do not need to start paying it back until they are out of the business three-year danger zone, allowing them to build the business for not only survival but for growth. It’s help like this, you should be asking your local MPs for and that we want to see from the government and politicians as we head into the election.
We also want politicians to realise that there is so much they can do to help small businesses and even the little changes add up. Take the penny off a pint introduced in the Budget, while it may not sound like much, the British Beer and Pub Association reckon this will help create almost 4,000 jobs this year and save drinkers and the trade £180 million.
So it’s not just dramatic reform and change that we’re calling on politicians for, it’s small changes too and the penny in the pint demonstrates perfectly the impact these small changes can have.
So with only a few weeks left to go before the election, we’re calling on politicians to start listening to the concerns of small businesses and make them a key priority or risk reversing the economic recovery small businesses are currently driving.