The Spring Statement is a bit of a misnomer, as it comes at the end of the fiscal year. The good news for small businesses who were simply struggling to make ends meet this tax season or waiting on their next payment from government contracts?
The Chancellor has confirmed that there will be £3bn more funding available in 2019/20 than previously budgeted. This might not seem like much but when you consider how many small businesses struggle just to live and survive then this could have an impact across all sectors
The going has been rough, but there may be a ray of optimism on the horizon. (Photo courtesy of Getty Images)
Imagine a day in the life of a small company owner ahead of this year’s Spring Statement to get a feel of what was at risk.
Imagine the following scenario: it’s the year 2020, you’re a restaurant owner, and everything is fantastic.
You’ve just come off a successful holiday season, with three major corporations with offices in the area hiring your venue for their Christmas parties, and your takeout menu proving so popular that you’ve hired a driver.
You’ve also hired an additional waiter to deal with the increased demand. Profit margins are strong, and energy and ingredient prices are reasonable.
Then, seemingly out of nowhere, the happy times vanish. It’s March, the economy has collapsed, and while you could hear your regulars catching up over their favorite dishes just a few weeks ago, you can now hear a pin drop.
Those huge corporations have failed to pay their December gatherings’ bills. You pursue them, but they claim they were forced to extend payment terms owing to a disturbance. The thousands of dollars they owe you are now at the top of your lengthy list of concerns keeping you awake at night. You, on the other hand, manage to keep the show on the road.
In the summer of 2020, amid predictions that the epidemic would be well under control by the winter, you take advantage of the government assistance that we at the FSB fought so hard to acquire, and take out a sizable Bounce Back Loan.
That is, until it isn’t. Instead, you spend the next two years adjusting, managing ever-changing workplace norms, and inventing to grow the takeout arm of the company as more and more customers choose to remain at home.
Recent years have seen a lot of ups and downs in the takeaway industry.
You assume you’ve made it through the worst of it by the start of this year. A large number of customers have returned to the restaurant, and your takeout driver is constantly busy.
Then, seemingly out of nowhere, your energy provider contacts you to inform you that they have gone out of business. You’re transferred to a new provider, who notifies you that your utility costs will skyrocket by thousands of dollars per month, effective immediately.
With the cost of petrol for your driver rising at the same time as food costs, it’s thousands you don’t have.
Every day, your stress level rises. Your alternatives are restricted to raising prices, which may result in a loss of consumers, letting employees go, which you want to prevent at all costs, or giving up completely. By the way, those bills you’ve been pursuing for months? They have yet to be compensated.
As the deadline for yesterday’s Spring Statement approaches, you’re hoping without hope that the Treasury would do something to reduce your overheads, which are eroding your already razor-thin profit margins. Fortunately, there is a ray of hope at the end of the tunnel.
For this fiscal event, the Chancellor chooses to implement the FSB’s top request: raising the rebate you get on your National Insurance payment as a small community company to $5,000. As a result, he makes keeping track of your headcount a lot simpler.
Fuel duty reductions should aid delivery. (Photo courtesy of Getty Images/John Keeble)
Fuel duty will be reduced as well. As a result, your driver will be able to continue delivering those takeout transactions that have been a cornerstone of your business. There are additional benefits to yesterday’s declaration, such as an ongoing savings on your company rates payment for the next year and beyond.
The obvious direction of travel was maybe the most essential message from yesterday. The Chancellor has now made it clear that he wants to foster a “new culture of business” by announcing a tax strategy that will lead to more significant reforms in the fall budget.
That commitment came on the same day the ONS announced that company input cost prices had now reached 14% (consumer prices are growing at a slower, but still record-breaking, 6% – illustrating the lengths to which enterprises will absorb the gap).
further information: Metro newspaper
It is against that backdrop that FSB will continue to work tirelessly over the summer in our efforts to take 200,000 more small firms out of the business rates system altogether in levelling up target areas, protect SME incentives to invest in R&D, and support small firms with their energy bills and on their journey to achieving net zero emissions.
We’ll be working hard to eliminate those outstanding bills as well. Our idea to hold major corporation audit committees completely responsible for supply chain practices has already been embraced by the government. Now is the moment to put your words into action.
The Chancellor can make his vision for an economy based on entrepreneurship a reality by working with and listening to small business, as he did yesterday on the Employment Allowance.
The Federation of Small Businesses is chaired by Martin McTague.
Do you have a story to tell?
Send an email to [email protected] to get in contact.
MORE: After the outcry over the Spring Statement, Rishi Sunak embarks on a grueling series of interviews.
MORE: Your take-home pay after the spring statement is calculated using a tax calculator.
