Budget 2017: Thoughts and predictions from small businesses

Here, we look at the hot topics concerning small business owners ahead of the 2017 Budget announcement.

The 2017 Budget will hold interest for small businesses particularly in the areas of business rates and NI

The 2017 Budget will hold interest for small businesses particularly in the areas of business rates and NI

Here, we look at the hot topics concerning small business owners ahead of the 2017 Budget announcement, ranging from business rate hikes, to exchange rates to technology innovation.

On business rate hikes

Jonathan Richards, CEO at breatheHR comments, ‘Remember the prime minister’s first promise? ‘To make Britain a country that works for everyone’. Fast forward seven months and we now have business rates hikes. Increased rates will have catastrophic impacts on small businesses and knock-on effects on productivity – the darling of the Autumn statement.

The FSB reported that half those SMEs facing hikes will reduce, postpone or cancel investment – a devastating outcome. The government should be doing all they can to fuel small businesses growth, not hinder it by adding hurdles for SMEs to jump over.

‘The government hinted it would help those small businesses hit the hardest by the hike with a £3.6 billion fund. But this money is not enough for the millions of SMEs that will be in need of it.

The Chancellor needs to set aside more cash for SMEs in the upcoming Budget and create a support system where small businesses can speak to experts who can advise them on how best to handle the hikes.’

On the education system overhaul

With an expected overhaul of the education system, with a focus on technical training, skills and an overall £500 million to plug the post-Brexit skills gap, Siobhan Hafferty, head of public sector at CenturyLink says, ‘These proposals are essential for tackling the UK’s skills crisis and will give a new generation access to technical, tailored courses in critical industries.

‘However, it’s also important that the private sector supports this initiative through mentoring, training and relevant collaboration to ensure young people are given direct industry experience.

‘With the government’s digital strategy transforming public services, it’s vital that we build a digitally proficient workforce with the correct skills to manage these services, securely.’

On tech implementation

William Newton, EMEA director at WiredScore says, ‘We’ve recently seen commitment from the government toward the implementation of full-fibre networks and 5G infrastructure although, to date, this has largely been focused around residential connectivity needs.

‘However, many businesses in the UK still need faster, more reliable, more affordable internet to be able to grow. The Cloud isn’t any use if you can’t access it. Indeed, nearly a third of British SMEs are still without access to super-fast broadband and 130,000 businesses across the country receive speeds below 10Mbps.

‘A greater reliance on technology has made connectivity the lifeblood of the modern business, so we need to ensure that businesses have access to the excellent, underlying digital infrastructure they need to help them thrive in the digital economy.

‘While it’s certainly encouraging that the government is committed to implementing this infrastructure, we believe it could take a more radical approach. Business connectivity could be improved on a more local level, by working closely with the new mayoral authorities and providing stakeholders in both the private and public sectors with resources such as the City of London’s Standard Wayleave Programme and Gigabit public WiFi.

‘For the UK to remain a central hub of innovation, it’s important that the government ensures its businesses have access to the best infrastructure possible to enable innovation and growth.’

On export and exchange rates

Lucy-Rose Walker, CEO, Entrepreneurial Spark, calls for Budget measures to support start-ups hit by the falling pound.

She says, ‘While those start-ups that export are seeing a buoyant international market driven by the falling pound, those who import goods and services are seeing the opposite. We’d like to see the Chancellor introduce some measures to support businesses in hardship due to the low value of the pound. We’d also like to see a clear action plan to get the pound back into a stronger position.

‘The planned business rate hikes will have a major impact on start-ups and scale-ups, pushing many entrepreneurs into financial distress. We’d like to see a more holistic review of business taxes, to simplify the system and make it easier for business owners to make long term financial plans. The current system penalises those with large premises, whereas we think entrepreneurs should be encouraged to invest and help bring our business parks and commercial and industrial zones back to life.’

On manufacturing and artificial intelligence

Chancellor Philip Hammond expected to outline plans in Wednesday’s Budget to make hundreds of millions of pounds available to develop solutions to hi-tech challenges including artificial intelligence and robotics.

Earl Yardley, director at Industrial Vision Systems says that these announcements will ensure that UK manufacturing is placed at the centre of a better-balanced economy and demonstrates that investment in cutting edge industrial automation and Artificial Intelligence will drive manufacturing growth for years to come.

‘Investment in skills today will pay dividends for generations to come, enabling the UK to harness the technological innovations to deliver projects that improve business and communities and thus deliver economic growth.

‘Adoption of automation technology is growing rapidly and we have witnessed clear evidence that UK manufacturers in sectors such as automotive, electrical, and pharmaceutical, are adopting standard manufacturing principles which have been used in German manufacturing for many years, and this has resulted in a transition which has seen the performance of the manufacturing sector in the UK change significantly through continuous investment, and all for the better.

‘UK factories continue to make products that are more competitive now than at any time in the modern era. This investment in the engineers of tomorrow along with cutting edge industrial automation ensures we are heading in the right path to make Britain the world leader in Artificial Intelligence and robotics.’

On changes to VAT Flat Rate Scheme

Jason Kitcat, Head of Policy & Public Affairs, Crunch Accounting says, ‘Our 10,000 small business and self-employed clients will be hoping that the Chancellor reconsiders some of the half-baked proposals from his Autumn Statement including changes to the VAT Flat Rate Scheme and public sector IR35 rules.

‘What our clients would like to see is a clear long term strategy from the Treasury which, beyond the corporation tax cutting obsession, levels the playing field to support those genuinely working for themselves. Unscrupulous agencies and corporates profiting from disguised employment need to be stamped out whilst real small businesses are encouraged with fairer, simpler taxes.

‘With the RSA we recently launched ‘The Entrepreneurial Audit’ with 20 policy ideas for government to support self-employment. We hope the Chancellor will look to those as he prepares his budget speech.’

Further reading on Budget 2017

Nominations are now open for the British Small Business Awards 2017, the leading event celebrating the brightest stars in the SME sector. Click here to enter. Good luck! Make sure you get involved using the hashtag #BSBAwards today.

 

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