Provide simplicity and stability and then leave us to get on with running our business, UK SMEs tell the new Government
- Simplifying the PAYE system tops immediate wish list for almost a quarter (22%) of UK SMEs
- Other priorities for the next 12 months include a commitment to remain in the EU (30%), a reduction in business tax rates (30%) and legislation to end late payments by large companies (20%)
UK SMEs have laid out a manifesto of their own for the new Conservative Government, with simplifying the PAYE system their most acute priority. The top requests of the new Government are based on research by Bibby Financial Services which polled 1,000 UK SME owners and decision makers in the three days leading up to and following the General Election.
When asked which policies they would like to see from the Government over the next twelve months, 30% of SMEs called for a commitment to remain in the EU. The future of the UK’s EU membership was a higher priority for medium sized businesses, with 34% of those polled with revenue over £5 million stating that EU membership was a priority over the year ahead.
Tax was also a clear priority for SMEs, with 30% calling for a reduction in business tax rates, while 23% believe a clearer outline of how much small businesses will be taxed should also be on the Government’s agenda.
Commenting on the findings, David Postings, UK Chief Executive of Bibby Financial Services, said: “It is clear that the question of EU membership is a key concern for UK PLC. This is something the new Government will need to manage carefully as uncertainty will undoubtedly affect confidence and – ultimately - economic growth.
“How the UK’s relationship with the EU is redefined will have a real impact on the referendum. If Brussels fails to listen and act, the UK's membership is at risk.”
Pushing through legislation in the next twelve months to tackle late payments by large companies was also high on the list for a fifth (20%) of SMEs. This was of particular importance for 21% of those with revenues over £5 million. The continuing contest for talent was also identified as a priority with 19% calling on the Government to commit to building a more highly skilled workforce.
When looking at the policy environment to aid their business growth, over a quarter (27%) of SMEs indicated that a reduction in small business taxes would help them to grow. This was closely followed by the need for stable interest rates and no surprises with monetary policy (26%), which was a point most keenly felt by businesses with a turnover of less than £300k.
When considering the relationship between SME businesses and policymakers, just over a third (36%) agreed or strongly agreed that politicians understood the needs of SMEs. However, when asked whether they think politicians should stop tinkering with SME policy and to let them get on with it, just under half of business (46%) agreed or strongly agreed.
Mr Postings said: “Simplicity and stability are key requests from the UK’s SMEs for the new Conservative Government to deliver on over the next twelve months. With high employment but low productivity, there is a possibility that the UK could enter another recession over the next two to three years.
Slowing growth is a certainty borne out in the Q1 GDP figures and the Bank of England’s revised 2015 growth forecast. However, a majority Government able to make strong decisions over the future of the economy is likely to reduce the risk of recession.
“Primarily, the new Government must address the economic challenges ahead and create a stable environment for small businesses to flourish. The businesses we speak with tell us that this should encompass a reduction in the business tax rates and clarity on the tax regime over the next five years.
“What is clear from these findings is that a one size fits all approach is no longer acceptable when it comes to the UK’s SMEs. This is evident in the differing priorities and views of businesses at the smaller and larger ends of the scale. The range and mix of those that fall under the SME category are extremely diverse, each of which face their own challenges in looking to grow.”
The findings follow a mixed performance in the first quarter across some of the UK’s leading industries. Findings from Bibby Financial Services’ Business Factors Index Q1 2015 report showed an overall drop in output among its 4,000 invoice finance clients.
Year-on-year output declined by 9% during the first quarter of 2015, with decreases experienced in transport (-11%) and manufacturing sectors (-5.6%). However, there was positive news in the construction sector which grew by 15% year-on-year along with growth in business services (+2%).