FSB is calling on all political parties to put the self-employed community front and centre when drawing-up business policies for their election manifestos as its latest research shows confidence among sole traders in negative territory for five consecutive quarters.
Well over half (62%) of sole traders do not expect their performance to improve over the coming three months, with more than one in ten (12%) expecting their performance to be ‘much worse’.
The new research shows revenue growth among the self-employed lagging behind the wider small business community. Around a third (35%) of sole traders report that revenues were up in Q3, while four in ten (40%) say they were down. Across London’s small businesses surveyed for the study, the net balance stood at -6.7.
Paradoxically, businesses in the North West and London report the strongest growth aspirations, with almost two-thirds (61.8%) of firms in both regions aspiring to grow over the next 12 months.
Elsewhere, the latest SBI shows sole traders continuing to struggle disproportionately when it comes to accessing external finance. Just 7% of self-employed respondents applied for credit in Q3, compared to 13% across the small business community as a whole.
While just under six in ten (59%) sole trader applications for finance were approved, seven in ten (70%) were successful across all respondents.
Close to two thirds (65%) of successful self-employed finance applicants were offered a borrowing rate of 6% or more, but this was the case for fewer than half (49%) of all successful small business applicants surveyed.
To reinject optimism into the self-employed community, FSB is calling on all major political parties to commit to:
- Delaying changes to IR35, or ‘off-payroll working’, rules set to take effect in April which would shift responsibility for determining worker status from contractor to employer, thereby making the hiring of sole traders less appealing.
- Ruling-out tax rises for the self-employed and freezing fuel duty, the Insurance Premium Tax, and the threshold at which sole traders must register for Value Added Tax (VAT).
- Bringing the maternity allowance for self-employed mothers in-line with statutory maternity pay and introducing paternity and adoption allowances for sole traders.
- Ending a £2.5 billion late payment crisis which disproportionately impacts micro-businesses.
- Overhauling the outdated business rates system, starting with a significant uprating of the £12,000 rateable value ceiling for small business rates relief.
FSB London Chair, Sue Terpilowski OBE, said: “Our near one million-strong small business community in London has suffered massively as a result of three years of indecision and dithering in Westminster. This election is a chance for politicians to turn the tide, get back to domestic issues and support the sole traders that drive our economy forward.
“Business rate support is critical to London businesses who have been hit by the 2017 revaluation. We ask all candidates running to become MP’s in the capital to heed the calls of small firms by promising to campaign on the issue of business rates reform and support if they are successful on December 12th.”