While Theresa May can’t guarantee the support of the small business community before the election season, she can be reassured that its confidence in its own growth is the highest in four years, according to the latest Enterprise Index results from Smith & Williamson, the accountancy, tax and investment management group.
The Enterprise Index, a quarterly barometer testing the views of over 200 business leaders and entrepreneurs, reveals that 85 per cent of entrepreneurs and small business owners are planning for growth and 80 per cent are optimistic about their own prospects over the next 12 months.
Crucially, they are nearly 30 per cent more positive about their own growth than at the end of 2016, the highest point since mid-2013.
However, the Tories can’t assume they have locked-in widespread support from small businesses and entrepreneurs before the election. The Enterprise Index highlighted this as the fourth consecutive quarter where SMEs perception of support offered by the government has declined, with less than half (45 per cent) expressing positive opinions toward government policy.
Guy Rigby, head of entrepreneurial services at Smith & Williamson, comments, ‘There is no doubt that small businesses continue to have gripes about the government policy. However, the Prime Minister seems to have caught them in a buoyant mood. It’s possible that, by triggering Article 50, entrepreneurs at least feel some progress is being made. In addition, the high profile climb-down on self-employed National Insurance Contributions (NICs) appears to be evidence of a government that is listening.
‘Notwithstanding this, there has been a growing mistrust in the government due to a credibility gap between what the government is saying and what it is actually doing.
‘Within the past few months they have delivered an industrial strategy green paper, a scale-up champion and a scale-up taskforce but this has yet to deliver meaningful change. However, at the same time, the government has slashed the tax free dividend allowance by 60 per cent, causing problems for many.’
Rigby adds, ‘The Apprenticeship Levy is a great idea in theory, but less than half (46 per cent) of our respondents believe it is likely to be valuable in practice. The administrative necessities could mean that most small businesses will not participate, leading to disappointment over the number of new apprentices. It is therefore a concern that the levy could just become a stealth tax on larger businesses.’
Further reading on election seasons
Nominations are now open for the British Small Business Awards, the leading event celebrating the brightest stars in the SME sector. Click here to enter, and make sure you get involved today using the hashtag #BSBAwards. Good luck!