{"id":28193,"date":"2017-11-22T10:31:13","date_gmt":"2017-11-22T10:31:13","guid":{"rendered":"https:\/\/www.clearbooks.co.uk\/blog\/?p=28193"},"modified":"2018-11-20T09:26:10","modified_gmt":"2018-11-20T09:26:10","slug":"government-budget-challenges-small-business-owners","status":"publish","type":"post","link":"https:\/\/www.clearbooks.co.uk\/blog\/government-budget-challenges-small-business-owners\/","title":{"rendered":"Government failing to understand our challenges, say small business owners"},"content":{"rendered":"<p><em>The majority of small business owners* in the UK do not think the government understands the challenges they are facing, or the opportunities open to them. In all, 82% of the owners we surveyed supported this point of view.<\/em><\/p>\n<p>Phil Sayers, CEO of Clear Books, said: \u201cIn many ways perception is everything and whether the government does understand the challenges and opportunities facing small business owners or not, there appears to be a disconnect between the legislature and the small business community.\u201d<\/p>\n<p>Sir Vince Cable, former business secretary and former leader of the Liberal Democrats, also commented on our findings, saying: \u201cDespite many schemes over the years it is clear that government still finds it difficult to understand the barriers facing small business. When in government I launched the Start Up Loan Scheme and the Accelerator mentoring scheme (since scrapped). But I recognise that the culture of government is quite different from and often unhelpful to SMEs.\u201d<\/p>\n<h4>&#8220;Harder to start or grow a business&#8221;<\/h4>\n<p>Bill Esterson, the shadow small business minister, alluded to the fact that there are reports that the government is planning to lower the VAT registration threshold.<\/p>\n<p>\u201cThey are introducing the time consuming quarterly filing of tax returns, they previously suggested increasing National Insurance for people who are self-employed and they have presided over a collapse in lending to smaller businesses. All of these measures make it harder to start or grow a business,&#8221; he said.<\/p>\n<p>\u201cSmaller firms are responsible for 15 million jobs and 60% of all jobs in the private sector, helping smaller businesses to start and grow is an essential part of a proper strategy for the success of our economies, communities and prosperity.\u201d<\/p>\n<p>Following on from these findings, in an online focus group we asked small business owners what the government could do to encourage a more positive outlook when the Chancellor, Philip Hammond, <a href=\"https:\/\/www.clearbooks.co.uk\/blog\/chancellors-november-budget-your-business\/\" target=\"_blank\" rel=\"noopener\">reveals his November Budget<\/a>. Unsurprisingly, we heard a range of opinions.<\/p>\n<h4>What can the government do to help small businesses?<\/h4>\n<p>Liz, the owner of a micro-bakery business, told us that \u201cfunding, mentoring, on-going business support and simplifying the tax system needs to be a priority\u201d to encourage more people to establish businesses.<\/p>\n<p>Murad, a property developer from London, believes the government should make the transition from being an employee to becoming a business owner \u201cless bureaucratic and provide easier access to funding for exceptional university graduates who do not want to start work with a firm\u201d.<\/p>\n<p>Paul, who works as a legal services business owner, wants the government to stop increasing tax for dividends. He said: \u201cif you take risks you should get rewards\u201d.<\/p>\n<p>Mark, who is a small business owner from Essex, called on the Chancellor to \u201cacknowledge and develop a strategy for support for micro businesses by removing them from the ridiculously broad descriptor as part of the SME sector. If you turn over \u00a315k per annum, you have different methods, issues and resources than one with a \u00a3249 million turnover&#8221;.<\/p>\n<p>We also heard from Kelly, the owner of a marketing business. She said: \u201cI think the government does understand to an extent or at least tries to, but it forgets those first steps that businesses need to become small businesses in the first place. I am a micro-business trying to become a small business without relying on getting loans and funding. I became an employer this year and the increase in costs has far outweighed my expectations. I\u2019ve felt pressured to increase my revenue just to cover these costs\u201d.<\/p>\n<h4>Increasing tax incentives would be the most positive change<\/h4>\n<p>Margaret runs an agricultural business based in the North East. Her suggestion was to remove the pension onus from small business owners. \u201cWe have already gone through enrolment and the time it took to work out what had to be done and then implement it was ludicrous. Government should be doing this so small business owners can run their businesses&#8221;.<\/p>\n<p>Regarding Philip Hammond&#8217;s November Budget itself, we found that increasing tax incentives would be the initiative that, if introduced, would have the most positive impact for small businesses.<\/p>\n<p>Business owners who took part in our survey also cited a corporation tax reduction, a cut or freeze to business rate increases, better access to business funding and a simplified tax system.<\/p>\n<p>Andrew, a sole trader who owns a recording studio in the North West, put forward the case for VAT relief for businesses that fall below the threshold. He said it currently stops him from investing &#8220;because I can\u2019t really charge my customers VAT but I need to buy equipment&#8221;.<\/p>\n<p>Janet, who has a book-keeping business in the South East, wants money that&#8217;s owed to be refunded more quickly than it currently is.<\/p>\n<h4>What business owners don&#8217;t want to see in the Budget<\/h4>\n<p>We also asked what Budget announcement would have the most negative effect. Business owners were more evenly split, raising issues such as an overall tax increase, a rise in the rate of VAT, further increases in National Insurance contributions for small business owners and sole traders, as well as a reduced tax free allowance for small business owners.<\/p>\n<p>One of our participants suggested there should be an increased VAT threshold, while the owner of a London-based IT microbusiness said a cut in corporation tax should be permitted if a business can show that the saving was being re-invested.<\/p>\n<p>\u201cWhat is apparent from the input of the small business owners that we spoke to is a restlessness among this important element of the British economy,\u201d said Clear Books CEO Phil Sayers.<\/p>\n<p>\u201cThere is an anxiety about the apparent disparity between the taxation demands made on small businesses compared with larger businesses; a desire for greater simplicity in what is being asked of them and perhaps greater incentives to recognise the position of small businesses as drivers of innovation, job creation and the engine room of the economy.\u201d<\/p>\n<p>More than half of our participants said they would turn to a small business organisation or network if they needed advice about running their business. Almost a third said they would consult their accountant, while roughly one in ten revealed they would seek advice from family members or friends.<\/p>\n<p>We offer a wide range of guides to keep small business owners up to date and informed about changes that matter to them. <a href=\"https:\/\/www.clearbooks.co.uk\/blog\/\" target=\"_blank\" rel=\"noopener\">Why not take a look?<\/a><\/p>\n<p><em>*One hundred small business owners based across the UK were surveyed by Clear Books in late October\/early November 2017. They were asked: &#8220;Do you think the government understands the challenges and opportunities facing small businesses like yours in the UK&#8221;.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The majority of small business owners* in the UK do not think the government understands the challenges they are facing, or the opportunities open to them. In all, 82% of the owners we surveyed supported this point of view. Phil [&hellip;]<\/p>\n","protected":false},"author":145,"featured_media":28195,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-28193","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Government failing to understand our challenges, say small businesses<\/title>\n<meta name=\"description\" content=\"The majority of small business owners in the UK do not think the government understands the challenges they are facing or the opportunities open to them.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.clearbooks.co.uk\/blog\/government-budget-challenges-small-business-owners\/\" \/>\n<meta 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