Small Businesses in the news 16th October 2017

Rate rises to hit 120,000 small businesses

Nearly 120,000 small shops and pubs could be hit with business rate hikes of up to 15% next spring, experts have warned.

The increases are expected in April as the rates are linked to September inflation figures out next week – when a Retail Price Index increase of 4% is expected. Ratings agency CVS said the Government’s own formula would see 24,000 small shops and pubs face rises from four to 9.99%, while some 96,000 will see rises from ten to 14%. Mark Rigby, of CVS, said: “The Chancellor must be bold with his upcoming Budget next month and freeze rate rises in April 2018.”

A Freedom of Information request by CVS reveals that 164,757 business premises in England and Wales were taken to court in 2016-17 after failing to pay their business rates. In the current financial year, a total of 81,093 businesses have been summoned to court for failing to pay their rates. What are these rates going to look like next year as pressure on small firms is set to increase? With business rates expected to rise by 4% in response to official figures from September’s retail price index, the cash flows are going to be under further risk.  Do you supply small shops and pubs? Do you supply businesses with large business spaces that will be particularly hit by the rises? Be vigilant for any change in payment patterns.  As cash flow tightens you will need to be proactive in your account recovery to make sure you get paid ahead of their other suppliers.

 

The entrepreneurial spirit isn’t dead

However despite the increased pressure on small businesses and an uncertian environment,  British entrepreneurs appear unfazed. Despite the uncertiantity of brexit, rising interest rates and inflation, we saw a record rise in the number of UK start-ups over the last year. There were 660,000 new businesses in 2016 compared with 608,000 in 2015 – with that record expected to be broken again this year in 2017 , according to the think tank Centre for Entrepreneurs.

In fact, according to eBay’s UK boss Rob Hattrell, the creativity and the “strong entrepreneurial streak” of the country’s small businesses helps them see Brexit as an opportunity rather than a barrier.

 

Research by Moore Stephens also shows the number of young entrepreneurs in the UK is soaring as millennials shun graduate jobs at large firms to go it alone. The firm found there are now 311,550 company directors under the age of 30, up from 295,890 just two years ago.  The rise in self-employment since the financial crisis has seen sole proprietorships fall out of favour, as more self-employed workers set up as companies to become more tax efficient.

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