Julia Irvine 6 Mar 2019 12:11pm

Small businesses struggling to cope, says FSB

The FSB is calling on chancellor Philip Hammond to help the small business community which is buckling under the burdens of Brexit uncertainty, business rates hikes, pension contribution increases, Making Tax Digital for VAT and the late payment crisis

The small business trade body wants him to use his Spring Statement next week to take action, including on his promise in the 2018 Spring Statement to address “the scourge of late payment”.

It also wants a one-year safe harbour approach to MTD-related fines for small businesses, thousands of which are not yet prepared for the new regime, and exemption for certain businesses – in particular, childcare providers – from the “unfair, regressive tax” that is business rates.

The FSB says that small businesses are struggling to cope at the moment and points to the latest results from its small business index. This has now been in negative territory for three consecutive quarters – for the first time in its nine-year history. It stands at -5.0, down from +6.0 in the same period last year.

The survey also found that 70% of small businesses believe their performance will not improve over the next quarter.

Interestingly, while they blame Brexit for much of their woes, many say that the UK economy presents a bigger barrier to growth.

“We small business owners tend to be an optimistic bunch,” said Mike Cherry, the FSB’s national chairman. “The persistence of this current wave of pessimism is unheard of. Even in the wake of the crash, when the economy was well and truly on the ropes, we didn’t see negativity take hold like it has now.

“Small firms still have no idea what regulatory framework they’ll be working to in three and a half weeks’ time. Not only does the political stalemate surrounding Brexit make it impossible to plan, it has also distracted from the domestic policy agenda.”

Cherry believes that the chancellor has it within his power to help arrest the ongoing slump on small business confidence.