New Office for National Statistics (ONS) figures show economic growth slowed in Q3 2021, with the level of quarterly GDP now 2.1% below where it was before the coronavirus pandemic hit.
The UK’s trade balance fell to a deficit of -1.2% of GDP over the same period, while taxes increased by 1.8%.
The latest research from the Federation of Small Businesses (FSB) shows that eight in ten (79%) smaller firms that will be impacted by the imposition of import checks next year are not fully ready to comply with new paperwork.
One in five (21%) small exporters has temporarily or permanently stopped exporting to the EU – a further 7% are considering stopping sales to the bloc.
Responding to the findings, Federation of Small Businesses (FSB) National Chair Mike Cherry said, “These deeply concerning figures point to the scale of the mammoth task that lies ahead in securing a sustainable economic recovery.
“As they attempt to focus on getting back to full strength, small firms are up against supply chain disruption, spiralling costs and debilitating skills shortages.
“Unfortunately, it’s against this backdrop that the government has decided to hike national insurance contributions and dividend taxation.
“We are now hurtling towards a flashpoint in April when the jobs tax and national living wage will rise at the same moment whilst business rates also kick in for many.
“The drop in retail sales is especially worrying to see as we head into Q4 – we’d urge everyone to get behind their favourite small businesses over the coming months in what will be a make-or-break festive season.
“Too many small exporters have already thrown in the towel in the face of fresh admin resulting from a new EU-UK trade deal, rising shipping fees and global trade disruption.
“They tend to be among our most profitable and innovative firms – we need more, not fewer, small businesses selling internationally if we’re to bounce back from one of the most severe economic shocks in history.
“The Budget was the government’s chance to bring in measures to assist small firms with rising employment, tax and shipping costs – it missed that chance.
“It’s vital that policymakers now move to increase the Employment Allowance to £5,000 to help the smallest employers, which are being hit with a jobs tax hike as furlough ends.
“We’re also encouraging government to revamp and relaunch the SME Brexit Support Fund – the first iteration gave us eligibility criteria that were too narrow and a timeframe for applications which was unrealistic.”