Small businesses and umbrella companies should plan ahead in order to cope with the changes that are likely to be introduced in next week’s budget.
The advice comes from Bibby Financial Services who say that SMEs have more chance of survival if they are prepared for change. Small businesses are likely to come under more pressure when new cuts are announced.
The first budget from the new coalition is likely to include reductions and changes to tax breaks and funding options for businesses in the UK.
The chief executive of Bibby’s said that firms should take steps to improve their cash flow by identifying areas where cash is currently unnecessarily tied up.
Freeing up cash reserves could be especially important if recent reports suggesting the HMRC ‘Time to Pay’ arrangements are true. There is speculation that these this may be abolished completely in the budget as part of the deficit reduction plan.
The FPB is strongly against such a measure saying that whilst it is important to bring the UK’s finances under control, it should not be achieved by pulling vital support to small businesses.
The Time to Pay scheme is the most popular business support scheme and since its inception only 3% of business owners have experienced difficulties getting access to it.
Other measures that would prove unpopular with small business owners include the controversial rises in Capital Gains Tax and VAT, both of which would increase red tape and lead to higher costs.
Last year, small businesses spent over £9bn per year, or a monthly average of 37 hours, on the cost of complying with business legislation, the FPB discovered.
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