By Francesca James
Ahead of the Chancellor’s Autumn Statement, UK business owners are calling on the Government to reduce the tax burden in a bid to stimulate growth, according to the latest biannual SME Trends Index from leading independent commercial finance broker, Hilton-Baird Financial Solutions.
The research, conducted in October 2012, questioned over 400 managing directors and finance directors to ascertain the key challenges businesses currently face. Asked what they believed the single most important action the Government could take to help their business to grow, 59% placed tax cuts highest on their wish list. This figure consisted of those hoping the coalition reduces VAT (30%), Corporation Tax (15%) and Income Tax (14%). A further 16% believed that new Government funding initiatives would most help their business.
When it comes to business confidence, two-thirds of businesses (67%) believe the uncertainty surrounding the UK’s future economic prospects is leading to the ongoing lack of consumer and business confidence. Other key factors that were highlighted include:
• Falling disposable incomes (46%)
• Negative media coverage (45%)
• Ongoing eurozone crisis (44%)
A further 43% stated a lack of available funding was leading to reduced confidence, with only 34% having secured new funding facilities in the last six months.
Evette Orams, Managing Director of Hilton-Baird Financial Solutions, commented: “The latest SME Trends Index shows that UK businesses have declared in no uncertain terms that high taxes are prohibitive to their quest for stability and growth. VAT has increased under this Government, as has Income Tax for the highest earners, in an understandable effort to keep the deficit under control. However, it is clear that this is impacting adversely on their demand for goods and thus business growth.
“While it is true that many businesses are finding it difficult to secure traditional finance, with the number of those using overdrafts and loans falling according to our research, businesses should be made aware that there are more tailored and flexible facilities available.
Encouragingly, the proportion of respondents using invoice finance and asset based finance increased over the past six months, and we urge businesses to assess the full range of funding solutions at hand to enable them to keep their cash flowing and their businesses stable.”