A new report published by Hitachi Capital has revealed that 67% of small and medium-sized enterprises (SMEs) are looking to prepare ‘growth plans’ in the coming three months.
According to the report, 50% of businesses require ‘extra manpower’, with IT and legal services firms being the keenest to recruit.
Meanwhile, a further 36% of SMEs are looking to ‘invest in new equipment’, with farming and agricultural firms reportedly the ‘most likely’ to purchase new tools. An additional 36% of businesses are seeking to expand into international markets, Hitachi Capital found.
However, with Brexit on the horizon, many small businesses are looking to ensure their finances are in good shape. 37% of business owners are considering cutting costs, and 20% are seeking to improve cashflow, the report suggested.
Commenting on the findings, Gavin Wraith-Carter, Managing Director at Hitachi Capital Business Finance, said: ‘What is so encouraging from our new study is that the small business community is not sitting back and waiting for a Brexit outcome to be known. They have told us they have concerns, but they are acting on them.
‘The businesses that predict the most significant growth are those that are investing in their businesses – bringing people in, looking at new markets and looking at the equipment they need to power growth.’
The Federation of Small Businesses (FSB) has urged the government to invest in innovation in order to help ‘boost productivity’ amongst small and medium-sized enterprises (SMEs).
A report published by the FSB has suggested that 24% of UK SMEs and sole traders have not made any significant changes to products or processes in the last three years, with many citing pressure on time and finances as being a barrier to innovation.
The report also revealed that 76% of SMEs have made significant improvements to their business over the past three years. 95% of those who did innovate introduced a change to their business, such as new software, whilst 25% invented a new-to-market product.
In its report, the FSB stated that the government must ‘put more emphasis on supporting businesses to make improvements within their firm’.
The business group has called for the introduction of a new tax credit to help ‘alleviate the opportunity costs attached to small business owners’ who take time out of their firm to undertake leadership and management training.
‘Think of innovation, and introducing new, market-changing inventions might spring to mind. While these are undoubtedly important, our research shows that changes made within small businesses can have huge impact on their productivity,’ said Martin McTague, Policy Chairman at the FSB.
‘We are calling for the government to explore putting in place a tax credit for those time-poor small businesses that can’t afford to take time out of their everyday businesses to take part in training.’
New research commissioned by HMRC has revealed that more than half of small and medium-sized enterprises (SMEs) believe that HMRC’s tax investigations are ‘too intensive’.
Insurer Professional Fee Protection (PfP), who undertook the research, found that 52% of SMEs believe that tax probes are ‘too rigorous’, while an additional 56% think HMRC investigations are ‘too costly and time consuming’.
PfP warned that tax investigations often prove to be disruptive for SMEs, with many resulting in significant professional fees.
Commenting on the issue, Kevin Igoe, Managing Director of PfP, said: ‘Small businesses think they are getting rough treatment from HMRC and are making this clear. [They] are often at the receiving end of lengthy tax investigations, which can be very disruptive. Many of these businesses also do not have the resources at their disposal to manage an inquiry or negotiate with inspectors.’
According to the research, 48% of SMEs ‘do not believe that HMRC’s penalties are fairly distributed’, and many think that small firms are ‘unfairly targeted’.
PfP also revealed that, in 2016/17, HMRC’s investigation teams collected an additional £16 in taxes for every £1 spent on investigatory staff.
A report published by banking group Close Brothers has revealed that 71% of UK small and medium-sized enterprises (SMEs) would like the UK’s business rates system to be made ‘simpler and more flexible’.
The report also suggested that 49% of SMEs believe that the government is ‘not doing enough’ to help businesses with business rates relief. Just 36% believe that they receive adequate support from the government in regard to their business rates.
In addition, Close Brothers revealed that 56% of UK small firms have experienced increases in their business rates over the past two years. London, South West England, Yorkshire and Scotland in particular have been adversely affected by rate rises ‘above the UK average’, the report suggested.
Commenting on the matter, Neil Davies, CEO of Close Brothers, stated: ‘Steps are being taken, as demonstrated by an initiative that’s been in place from 1 April 2017 that saw 100% relief, doubled from the usual rate of 50%, for properties with a rateable value of £12,000 or less.
‘That said, the message from SMEs is clear that more needs to be done.’
In the 2017 Autumn Budget, Chancellor Philip Hammond announced that future business rates revaluations will occur more frequently. Revaluations will now take place every three years rather than every five years, beginning after the next revaluation, which is currently due in 2021.
Late payments ‘remain a real problem’ for UK small and medium-sized enterprises (SMEs), research carried out by accounting software company Xero has suggested.
Its Small Business Insights report analysed 7.5 million invoices with 30-day payment terms that passed through the Xero system, and revealed that 52% of SMEs’ invoices were paid late in 2017, with the worst months for late payments falling in the first quarter of the year.
Xero also found that the average time taken for an invoice to be paid was 40 days, meaning that the 30-day payment term had not been adhered to.
Further analysis of different business sectors within the FTSE 350 showed that food producers took the longest amount of time to pay invoices, taking 60 days to pay, on average.
Businesses in the construction and materials industry took an average of 57 days to pay invoices, and household goods companies took an average of 53 days. Meanwhile, the pharmaceuticals sector payed invoices the most inconsistently, with some payments taking as little as 37 days, and others as many as 68 days.
Late payments have a ‘broader effect’ on small businesses, with affected firms often struggling to carry out accurate financial forecasting, said Xero.
Chancellor Philip Hammond has pledged to tackle the issue of late payments, and the government appointed the first Small Business Commissioner, Paul Uppal, in October 2017. Mr Uppal has been tasked with helping small firms with their payment disputes.
He said: ‘Small businesses are crucial to the health of our economy so it is vital that they feel supported in all areas, but particularly in the fight against late payments.’
A survey carried out by distribution group CitySprint has suggested that UK firms are considering trading internationally in order to grow and expand their business.
The survey, which polled over 1,000 business owners and directors, revealed that around 1.3 million small and medium-sized enterprises (SMEs) are focusing on international trade in their plans to expand their business.
78% of those seeking to trade overseas indicated that they would like to do business in Europe, CitySprint found.
A further 55% are considering trading in North America, whilst an additional 36% expressed an interest in trading in Asia.
Businesses in the retail, manufacturing, arts, IT and utilities industries are most likely to consider trading internationally, CitySprint suggested.
Meanwhile, the survey also revealed that 52% of firms have plans to expand their business within the UK.
Commenting on the findings, Patrick Gallagher, Group CEO at CitySprint, said: ‘The UK’s smaller enterprises show no shortage of ambition when it comes to exploring new markets.
‘Whether it’s going global or taking trade nationwide for the first time, scaling up is a huge milestone in any organisation’s history. It needs to be done thoughtfully and with care – but it doesn’t have to be done in isolation. SMEs must work together to realise their goals.’
With less than one month until the introduction of the new General Data Protection Regulation (GDPR), the Federation of Small Businesses (FSB) has warned small and medium-sized enterprises (SMEs) that time is running out for them to prepare.
The business group stated that small businesses face an ‘uphill challenge’ in ensuring that they are compliant by 25 May 2018 – the date from which the new regulation takes effect.
Under the new rules, organisations which collect, store and process individuals’ personal data will be subject to new obligations, with an increased emphasis on accountability and transparency.
The financial penalties for failing to comply are severe, with fines costing up to €20 million or up to 4% of total annual worldwide revenue, whichever is the greater.
The FSB has called on the Information Commissioner’s Office (ICO), the regulatory body that will monitor firms’ compliance, to adopt an ‘understanding approach’ to GDPR enforcement.
‘As the GDPR deadline swiftly approaches, there is a real danger that many small businesses are yet to have adequately prepared for the changes,’ said Mike Cherry, National Chairman of the FSB.
‘Fortunately for these businesses, there is still time on the clock to start, or finish, their preparations.
‘The GDPR is the largest shake-up of data protection laws for years, and whether you are a personal trainer or a consultant, most businesses will have to implement changes to their current practices to make sure they are complying with the new rules.’
Further information on the GDPR can be found on the ICO website.