Recent research has found that 61% of small business owners believe Brexit will have a negative impact on the economy. Despite not knowing what will happen, a majority of respondents stated that they just wanted to ‘get it done’.
The Time for Change study, conducted by accounting software vendor FreeAgent, found that the level of disruption created by Brexit uncertainty was having the greatest impact on small businesses.
Speaking to AccountingWEB about the survey, FreeAgent CEO Ed Molyneux said that Brexit means “nothing is being sorted” as the government doesn’t currently have the means to focus on other areas that could help small businesses.
While Molyneux expected negative responses to the survey’s Brexit questions, he said that the point of the exercise to raise key issues “that aren’t given enough precedence”.
FreeAgent - Time for Change
Late payments: A corporate criminal offence?
One of the most striking results from the survey was that 55% of small business owners believe late payments should be treated as seriously as corporate crimes, leading to potential prison sentences. But the reaction may be justified, considering how these payments often dictate whether a small business stays afloat.
FreeAgent - Time for Change
A meagre 7% of respondents claim to never experienced issues with late-paying customers.
“Small businesses have zero clout with big businesses,'' said Ed Molyneux, which according to the FreeAgent chief demonstrates a “real asymmetry of power” regarding prompt payments.
However, Molyneux did point out some legislative progress in this field, with the government’s introduction of new payment performance regulations forcing large companies to be more transparent with their payments.
The mental health issue
Mental health was another area of concern raised by the survey, with an alarming 51% of small business owners experiencing burnout as a result of overworking. Molyneux identifies it as “a big issue, especially in the early days for small businesses,” where businesses are essentially on pause when leave is taken.
FreeAgent - Time for Change
New businesses start out “because they want the freedom,” but being alone means the responsibility is continual. This pressure is reflected in the minuscule 6% of those surveyed who believe that adequate mental health support is available to them.
Lack of support in the current climate
Despite the rising number of new businesses starting out, the government is providing little support, with an alarming 1% being funded with any form of a grant. The lack of protection or benefits for self-employed people, such as sick, holiday and redundancy pay, demonstrates a systematic failure from the government towards new startups.
FreeAgent - Time for Change
A concerning 58% believe the UK tax system is geared up to favour large businesses. The government needs to “create a fair tax system that taxes people the same, irrespective of their situation,” said FreeAgent’s CEO.
New legislation, as we have seen with the upcoming off-payroll (IR35) rules, is “not fair for those people on their own” as it leaves individuals unclear on their status in self-employment, and ultimately demonstrates how the odds are stacked against them. What is needed is “a fair tax system that taxes people the same, irrespective of their situation.”
FreeAgent - Time for Change