Small businesses are looking to the new Government’s expected emergency Budget to ease the squeeze of soaring energy costs and a looming recession, according to new data from small business lender iwoca.
Nearly half (47%) of small business owners want to see the Government introduce energy grants, as increases in fuel prices threaten to cause them damage in the run-up to winter.
Second on SMEs’ list of policy priorities for the economy is an additional windfall tax on energy companies; two in five (41%) are calling for the ad hoc levy. Other key measures small businesses want introduced to mitigate the effect of energy bills include tax-deductible work from home costs like heating and lighting (30%).
With concerns over energy prices dominating the top of the list, in third place was cutting income tax, with 39% of businesses asking for this.
Small businesses call for tailored Budget support
With tax issues playing a central part in the Conservative leadership contest, small businesses told iwoca they’re looking for fiscal cuts for businesses in the Budget. As they grapple with higher monthly costs and cash flow restrictions, over a third of SME owners surveyed (36%) are calling for the proposed increase in corporation tax rate to be reversed, and a similar number (35%) want the same for the increase in national insurance.
Business environment even tougher than 2021, SMEs say
More than two in five small business owners surveyed (43%) say the UK business environment is worse than it was a year ago. By contrast, fewer than one in three (29%) small business owners think the business environment is better than it was last year.
Looking forward, more than one in three (34%) small business owners feel confident that the business environment will improve in the next year. A similar portion (33%) report feeling unconfident in an improvement in business conditions, reflecting the uncertain economic times the country is facing.
Cory Greenhough is the Managing Director of an online commercial refrigeration and catering equipment company, FFD. He uses iwocaPay, our B2B BNPL product, and told us: “A retail customer spoke to me the other day about how his energy bills have gone through the roof. We sold him an open-fronted fridge (where consumers can grab-and-go drinks and sandwiches etc.). They’re not particularly big pieces of equipment – his was about 1.5 metres. It’s currently costing him £10 a day to run these, per unit. He has two. So that’s about £600 a month just to run two small chillers.
“That’s before anything else – switching his lights on, paying his staff, his rent, his business rates – all of the rest of it.
“So even if you base it on the consumer cap increases, in October that’d go up to £18 a day, per fridge – so over £1,000 a month for the both of them. But there’s no cap on business electricity.
“In the past people have just thought about the cost of the piece of equipment, not the electricity they’ll need to run it. So now we’re now trying to educate customers about the most energy-efficient products they can buy.
“It’s really sad to think, but at this current rate, I think in a year’s time a lot of businesses – say your local gastropub in the country – won’t have survived this energy crisis.”
Christoph Rieche, iwoca CEO, said, “The next Government must have its eyes firmly fixed on support for small businesses, who are currently unprotected from soaring energy costs. It’s critical that the Budget carries a range of solutions for SMEs who are being disproportionately hit by current economic turmoil.”