Small businesses fear the future ahead of the Chancellor’s Autumn Budget in November as tax rises loom.
Ricky King, 35, a sales manager at Goats of the Gorge, a Bristol-based handmade skincare company, said small businesses have been hit hard by the cost-of-living crisis and economic uncertainty.
He said: ‘Our product is skincare – an optional, not a necessary product. We are lucky to maintain customer relations, but we have seen a drop in sales.
‘B2B [business-to-business] sales have dropped, but we are maintaining our efforts. Times are hard, we’ve had shops not able to continue selling our product [and some are] going under.’
Ricky said some shops that previously sold Goats of the Gorge’s products have gone bust – despite owing the company money.
Ahead of next month’s Budget, he urged Chancellor Rachel Reeves to make cuts to corporation tax to ‘help offset the economic impact’ on businesses.
He also said that cutting VAT to around 16-17% would make a ‘massive difference to us’ because the money would instead be reinvested in the business every quarter.
New research by Bibby Financial Services (BFS), a company which supports small businesses, has found that over half (52%) of SMEs believe Government initiatives are failing to protect them.
And more than six in ten (62%) said inflation and high costs are reducing their ability to invest in jobs and growth.
Now, top SMEs are demanding low-interest loans, reduced business rates and a reversal of the increase in National Insurance Contributions (NICs) ahead of the Budget.
US tariffs are also cited as impacting profit margins for many small businesses.
To help them reach customers in new markets overseas, nearly a quarter (23%) of survey respondents want the Government to establish new trade agreements, and 19% would like designated support to alleviate the impact of international tariffs.
Jonathan Andrew, chief executive of BFS, said: ‘The current economic climate is hugely challenging for SMEs that are seeing profit margins and spending power eroded, and overheads increasing.
‘On top of continued supply chain pressures both domestically and internationally, these issues pose a significant risk to economic growth, but more importantly, they threaten the survival of thousands of small businesses across the country.’
He added: ‘Businesses are crying out for support and are sending a clear message that the high cost of business experienced in recent years is reaching the boiling point.
‘What they need are practical measures that protect them against mounting cost pressures and volatile international trading policies. This support must be forthcoming if the UK economy is to prosper any time soon.
‘There’s a real opportunity in November for the Chancellor to back Britain’s small businesses with bold measures that cut red tape, roll back the burden of increasing costs and improve the environment for international trade.
‘SMEs need to see these promises turned into concrete actions that restore their confidence to invest, hire and expand rather than just survive.’