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Signs of strain in SMEs

ended 08. July 2025

We're writing a piece for one of the UK's largest national and local news publishers on whether accountants are seeing signs of financial strain on SMEs this year following the NI and minimum wage hikes - and broader weak economic backdrop. Are you starting to see cashflow issues appear, or are companies having to borrow to stay on top of their outgoings? Are you seeing a wider deterioration in SME finances or SME directors being forced to pay them (or their staff) less to stay afloat — or make cuts in other areas, such as benefits? Any thoughts by 17:00 please as this story will be syndicated tomorrow AM. Responses from accountants, practising tax experts and HRs only please.

2 responses from the Newspage community

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Editor
Wes Wilkes
CEO at IronMarket Wealth
The effects are very sector specific. Businesses and owners in hospitality and it's wider ecosystem continue to find things difficult with numbers significantly down year on year, whilst costs have increased.
Businesses supplying to and part of the infrastructure and construction sector are bouyant with forward looking orders up significantly year on year and even looking out 3-4 years ahead.
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Editor
Kate Underwood
Founder & Chief People Strategist at Kate Underwood HR and Training
If FTSE giants catch a cold, corner-shop cafés go on ventilators—one more statutory sneeze and the plug’s out.

Since 1 April the National Living Wage is £12.21 and employers’ NI 15 %. That’s a 6-8 % overnight payroll hike for the cafés, printers and digital agencies I advise. Cash-flow? More like cash-no.

One in four owners has frozen hiring or pencilled layoffs. Training cash raided, perk pots emptied quicker than a biscuit tin.

Late-payment roulette: 70 % of SMEs wait 47 days—usually for a household-name client. Lawyer up? With what war-chest?

HR triage: founders bin bonuses, cancel private care and join the four-day-week exodus (230 + firms) to save costs without cutting heads. Engagement dips as bean-bags and Friday beers vanish.

We’re propping up payroll with overdrafts and personal cards, hosting more burnout workshops than Christmas parties. One more statutory cost before late pay is fixed and viable small firms flatline—talent drain included.