Claims that the nation’s small businesses are under threat
A member of the UK200Group of independent chartered accountancy and law firms has commented claims that the nation’s small businesses are under threat, with an estimated 370,000 business owners seeking to shut up shop within the next five years because of the burden of red tape and bureaucracy. A toxic cocktail of threats, including Britain’s exit from the European Union, the ever-increasing burden of regulation, and the impact of global economic shocks, are driving small firms out of business, according to the annual business closure report, compiled by “business for sale” website Bizdaq. The research suggests that if these small businesses ceased trading, it could have a significant impact on the rest of the UK economy. The average small firm employs five people, suggesting that 1.8 million jobs could be at risk.
Jonathan Russell, partner, at UK200Group member firm ReesRussell, said:
“Many small businesses are finding things difficult especially those which are really lifestyle businesses designed to produce a family income as opposed to the entrepreneurial type which is intent on growth and expansion. The continuing sluggish economy meaning that sales growth is difficult alongside ever increasing operational costs many are considering exit. Part of the reason is that many are businesses set up years ago and the proprietors are looking at retirement and the business climate makes sale of the businesses more difficult. The economic climate is difficult for many reasons from the global slowdown caused in part by the slow-down in the emerging markets such as China, general business and economic uncertainty, the weakness of the Eurozone due to countries such as Greece and the upcoming referendum.
“All of these economic woes mean sales are more difficult but this is coupled with increasing pressure and burden from costs and regulation. Some of this is home grown; costs such as auto-enrolment and the National Living Wage and regulations such as RTI and the proposed Digital Tax but in addition some of it is regulations arising out of the EU and additional EU reporting requirements.”
