2017: What a rollercoaster ride
Well, no one can say 2017 was boring. From Brexit to budgets, this year’s been like one big rollercoaster ride with the brakes on the blink. And wherever your European or party political allegiances lie, one thing’s for certain. There’s been a lot of uncertainty about.
Now that the year is drawing to a close, we take a look at what the events of 2017 have meant for small businesses. While many will be rightly wondering ‘what’s next?’, this particular ride isn’t all doom and gloom. So strap yourself in, and let’s see what’s been happening.
Small business got a Budget boost
SMEs are the backbone of the UK economy, and helping them is seen as imperative while Britain prepares for life outside the European Union.
In the Budget, the Chancellor went some way to acknowledge the concerns of small business. The threshold below which firms don’t need to register for VAT was kept at £85,000 of turnover until at least 2020. It remains one of the highest thresholds in the world, except for Singapore, and dwarfs the EU average of £20,000. This goes against recommendations made by the Office of Tax Simplification in its recent review of VAT. It said that reducing the figure to £25,000 could raise as much as £2billion each year for the Exchequer, by bringing as many as 1.5million small businesses into the system.
Exports are on the up
Britain’s growth will rely on small businesses, and they’ve clearly been doing their bit with 2017 seeing a 13% increase in UK exports compared to the previous year. Another positive is that small businesses can now access UK Export Finance (UKEF) support directly from their bank, removing the burden of duplicate applications. In the 2016‐17 financial year, UKEF provided £3bn in support, helping 221 companies (79% of which were SMEs) sell to 63 countries around the world.
Things could get bumpy with Brexit
While 2017 was defined by the Brexit vote, it’s in the future where small businesses are likely to be hit hardest by the disruption. Firstly, the banking‐related effects of a hard Brexit could lead to a higher cost of capital for SMEs and more restricted access to wholesale banking services.
Secondly, the cost of making adjustments ‐ such as forming new banking relationships ‐ can be prohibitive. SMEs tend to choose a local bank and stay loyal to them. In fact, 60% of SMEs currently only use one bank for their business banking because of higher costs and greater difficulty when building new relationships, compared to larger corporates.
Thirdly, an independent report revealed that 55% of SMEs admit they’ve made no plans so far for Brexit. The assumption is that their banks will continue to provide financing and be there in the same guise. In addition, 44% of the SMEs interviewed expect their banks to absorb any extra costs caused by Brexit.
Getting equipped for 2018
Looking forward, small businesses will be mindful of equipping themselves to help smooth out the inevitable ups and downs in the year ahead. And we’ll be right here to help do that.
Having the right tech and apps can provide stability for whatever 2018 will bring, helping to keep your business running smoothly and efficiently. We’ve got plenty of tips and advice, from choosing the right phone for your business, to essential tools to use on it. It’s all about ensuring you’re fully equipped to help your business thrive ‐ whatever twists and turns the rollercoaster may take.
- Small businesses get a boost in the Budget as Chancellor tries to win entrepreneurs over MailOnline, November 22, 2017 Wednesday 1:47 PM GMT, page 1, MYRON JOBSON FOR THISISMONEY.CO.UK, web publication.
- SMEs must look upward and onward; Secretary of State for International Trade Liam Fox says growth must be constantly targeted by the country’s small businesses The Daily Telegraph (London), November 18, 2017 Saturday, FESTIVAL OF BUSINESS 2017;FEATURES; Pg. 3, Liam Fox, newspaper.
- Small businesses are likely to be hit hardest by Brexit disruption telegraph.co.uk, July 4, 2017 Tuesday 9:15 PM GMT, BUSINESS; Version:1, (829 words), By Simon Lewis, newspaper, web publication.