• 21% of respondents believe a cut in Corporation Tax would be the single most important action the Government could take to help businesses grow
• 19% of SMEs cite a reduction in VAT as the most important action the Government could take
• 8% cite a reduction in Income Tax to be their primary wish
With the Chancellor’s Autumn Statement set for 29th November, SMEs have given a clear mandate for change. Having been hit hard by the Government’s austerity measures, businesses are demanding various tax amendments to help them thrive. Despite prior cuts earlier this year, 21% of businesses questioned in Hilton-Baird Financial Solutions’ latest SME Trends Index said a further reduction in Corporation Tax is needed to aid growth.
Further analysis of the biannual survey showed that nearly one in five believe a reduction in VAT to be the single most important action the Government could take to assist growth (19%). Income Tax is also on the wish list for 8%, proving conclusively that tax cuts are a top priority for Britain’s embattled business community. Meanwhile, 9% placed the highest emphasis on last month’s £75 billion increase in quantitative easing.
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Managing Director of Hilton-Baird Financial Solutions, Evette Orams, said: “The coalition Government’s extensive spending cuts were put in place to cut the budget deficit and aid growth. However, latest statistics point to growth of just 1%* for the first nine months of this year. This has resulted in pressure building for the Government to change their approach, given their prior tactics do not appear to have borne the desired results. In contrast, as our survey has highlighted, the Government’s austerity measures have in fact left UK SMEs bearing the brunt of the pain. It’s also clear that cash flow remains paramount for businesses and this is also being tested at present from a number of directions, in particular by late payment and the sustained limited access to traditional funding facilities.”
The survey of 417 business owners and finance directors highlighted the key concerns for SMEs, with 17% reporting cash flow to be their primary concern. Additionally, 16% cited customer late payment as their primary concern when contemplating trading conditions over the next six months. A further 34% remain anxious about generating enough new business, and no doubt many are looking to the Government to step in and help ease the heavy burden on the UK’s SMEs.
Ahead of the Chancellor’s Autumn Statement, Evette continued: “Businesses are clearly concerned for the future and, while we appreciate the need for the Government to cut the deficit, we would urge them not to do so at the peril of UK SMEs. It is equally important that business owners investigate all available avenues in terms of finance facilities, in order to give themselves every possible opportunity to emerge stronger in the aftermath of the recent turbulence. Exploring specialist asset based finance facilities such as factoring and invoice discounting is recommended as these specialist facilities are not only more simple to operate than they may at first sound, but are also valuable tools that provide speedy access to the working capital required to sustain and generate growth.”
