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Small business owners views on the economy and thoughts ahead of the Budget

ended 19. September 2024

A journalist on the Sunday Times is interested in hearing the views of small business owners:

1/ On the state of the economy

2/ and thoughts ahead of the Budget and what you'd like to see in the Budget for small business owners
 


 

8 responses from the Newspage community

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Michelle LawsonVerified
Director at Lawson Financial
Small businesses are the backbone of the economy and contribute to 61% of the workforce so should be looked after. They should not be used as the cash cow to plug Labour's alleged financial 'black hole' otherwise good, reliable and viable businesses could be lost. It is imperative SME's are looked after as the effects could be catastrophic. SME's have taken the brunt of rising costs, increased taxation, rising wages- this doesn't get covered by the big corporate bank balances. There are true humans involved here where putting food on the table is the bottom line for the business owner and the staff. Rome wasn't built in a day and the 'black hole; should not be filled in one. There have been a number of tumultuous years which could be put behind us and the nation thrive and provide security long term for people- some of whom are the most vulnerable in society.
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Matthew KnightVerified
Independent Strategist and Freelancing Advocate at Freelancing.Support
The last five years, and in particular past 18 months have been incredibly hard for freelancers. A combination of IR35, Brexit and poor economy have led to many businesses avoiding working with freelancers and depressed average day rates - which have fallen by around £100 in the last quarter, according to IPSE.

I want to see more recognition of freelancers in the new budget - that we work without the protections which employees benefit from (such as sick pay, holiday pay, pension contributions, notice periods, etc), whilst paying similar tax and NI contributions.

I'd love to see a simplification of taxation and worker status, so "inside IR35" employment comes with rights and benefits; clear and obligatory contracts for any businesses who hire freelancers; and an independent body for reporting abuse of freelance workers (i.e. late payments, bullying, ghosting, harassment, etc).

I think all of this could be summarised as 'more respect', for the 7m+ people freelancing in the UK.
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Gabriel McKeownVerified
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
As the autumn budget looms, many small business owners feel a palpable sense of unease, with the warning of a painful budget on the horizon, leaving us walking a tightrope between hope and caution. Despite the government’s election mandate including a plan for small businesses, the looming threat of a sweeping tax reform has created a great deal of additional uncertainty, adding to the underlying economic instability. The government’s planned crackdown on late payments could be a game-changer for supporting small businesses, with improved cash flow allowing increased investment and job creation. However, the success of these SME-focused policies risks being overshadowed by the spectre of tax increases, particularly capital gains tax, which could significantly impact small business owners and start-up founders. Fundamentally, the government must weigh the trade-offs between immediate fiscal needs and long-term economic vitality, as a tax hike today could be a growth gamble tomorrow.
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Tony RestellVerified
Founder and Director at Social-Hire.com
There has been a marked shift in how small business owners are feeling about the economy. At the time of the election, there was a wave of positivity that a new government could herald a period of renewed optimism. But, rather than unlocking key business decisions being taken, the endless negativity from government since the election has simply dented business confidence further.

We are seeing this play out across the service sector, from recruitment businesses to consulting firms. What we all need from the government and the upcoming budget is a dose of positivity more than anything else.
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Patricia McGirrVerified
Founder at Repossession Rescue Network
If properly supported, small business don’t just survive, they help the economy thrive. As a small business owner, landlord, and investor, I’ve seen the economy take hit after hit. Inflation, rising rates, and squeezed consumer spending are serious concerns, especially for those managing property portfolios or relying on stable rents.

Ahead of the Budget, targeted support is crucial. Tax relief on investments and hiring incentives could be a game-changer. Business rates need urgent reform—they’re outdated and crippling for high street shops and landlords alike.

The government must prioritise cash flow solutions: better access to affordable financing and VAT reform for businesses just over the threshold.
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Ed Stittle0
Practice Owner & Chartered Accountant at ESDG Accountancy Ltd
The next Budget desperately needs more tax breaks for small business to attract the next generation of entrepeneurs.

A review of the Dividend Allowance would be a helping hand to small business owners. A husband and wife running a small business would typically have received the first £10,000 of dividends tax free, but now that amount has been slashed to just £1,000.

The reversal of IR35 would be an easy win and could actually increase overall tax take for UK PLC. Many IT Contractors we work with tell us they are losing out on projects to off-shore workers based in the EU and beyond, where IR35 is not a problem. This means money leaves the UK and is taxed in another country, not ours!
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Graham Wells0
Founder and Financial Coach at GroWiser Financial Coaching
The UK economy is still adapting to a turbulent post-pandemic and post-Brexit reality and there's too much reliance on profit-driven multi-nationals. Small businesses drive the innovation that's needed to adapt to a changing world. But at the moment, it's hard to see where the incentive lies in exchange for all the risk. Having experienced employed, contractor and self-employed work, all the risk and financial uncertainty sits with founders and business owners. Yet the UK seems to be obsessed with attracting and supporting huge, souless corporates. Relaxtion of IR35 for contractors and a restoration of reasonable dividend allowances would be a good start. It would be super if the budget created some tangible financial incentives to inspire potential business owners to take the leap.
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Kim McGinley0
Director & Specialist Broker at VIBE Finance
As a small business owner, it’s clear that we are at the heart of the UK’s economic engine. However, the current economic climate has created significant challenges, where rising costs, interest rates, and uncertainty are impacting both clients and the business itself. We’ve shown resilience, but there’s no denying that the pressure is mounting, and businesses are having to adapt quickly just to stay afloat. The government’s role in alleviating some of that strain is more critical than ever.

Looking ahead to the budget, I’d like to see targeted support for small business owners, particularly around tax relief and reducing the regulatory burden. Simplified processes would allow us to focus on growth, rather than being tied up in red tape. More accessible funding options would also provide a lifeline for businesses looking to innovate or expand. It’s time to see measures that truly recognise the role we play in driving the economy forwards.