What did the latest UK budget do for small businesses?
In our opinion, there was very little good news for small businesses in the 2023 budget.
Yes, they are now attempting to simplify the tax system but there didn’t appear to be any real significant support in terms of:
- Decreasing the overall tax burden
- Real support for the labour market and growth in skills development
- Reducing the barriers to trade outside of the UK market
- Reducing the risk of the increased numbers of business failures that are inevitable as a result of Brexit, Covid19 and now the war in Ukraine
What is the impact of this lack of support?
Well, the figures speak for themselves, business failures are on the increase. There were over 20,000 business failures in the UK in 2022, the highest number since the financial crisis of 2008-2009. The likelihood is that there will be 33% more business failures this year than before the pandemic. Since the government reduced its support for businesses, the reality is that businesses are suffering from a reduced market place, rising costs and having to pay back acquired debt such as bounce back loans. The situation for many businesses is become untenable and they are left with no choice but to cease trading.
We expect the situation to get worse before it gets better. All of which means that UK businesses are becoming under increasing pressure and their cashflow is worsening as a result of this.
How to reduce the risk to your cashflow?
- Keep your operating costs as low as possible
- Reduce the potential for bad debt
- Avoid customers who don’t pay on time or won’t pay at all
- Ensure that your credit control function is effective in limiting your financial risk and overall business viability
- Work with organisations like Late Payment Service to ensure prompt settlement of unpaid invoices before they become a bad debt
- Outsource your credit control function to Late Payment Service and reduce operating costs or bridge the existing skills gap
Get in touch with us if you’d like to know more about how we can help small business cashflow.
Author – Late Payment Service 2023.