It looks likely that a Spring Budget will take place on 23 March and the small business sector will be keen to see a show of support from the Chancellor after another tough six months and a mixed outlook for the rest of the year. Whether they get it remains to be seen.

Will the government act on the NI rise and business rates?

Attention is currently strongly focused on the fate of the planned rise in National Insurance – pressure is growing for the government to delay the launch in the face of increasingly difficult market conditions, with soaring energy and fuel prices and rising interest rates key features.

With regard to energy bills and fuel costs, with the impact of the Ukraine-Russia war set to drive prices already high prices even higher, it is hoped that the government may reconsider its policy as a mean to provide some relief for businesses. It has given little indication that it will change its strategy, but a U-turn shouldn’t be ruled out.

Small businesses will also be looking for help with business rates, with the Covid discount set to drop to 50% from 1 April 2022. Against the backdrop of rising prices, another tax hike won’t be welcome. Delaying the cut in discount is an option, as is introducing a business rates rebate in line with that talked about in connection to council tax.

Will policy change on other business taxes and Covid support?

Staying with taxes, a new plastic packaging tax is scheduled for introduction from 1 April 2022. The need to reduce the use of plastic packaging is clear as businesses have to contribute to net-zero targets, but the timing presents challenges for small firms.

Similarly, small businesses will be alert to news about the development of a new online sales tax. While there are no plans to introduce such a tax in the spring, consultations are ongoing and are due to conclude in May. Given the explosion in ecommerce, such a step could have huge ramifications for the small business sector.

Another policy with notable repercussions for small businesses is that relating to the future of the Recovery Loan Scheme and the schedule for repaying Covid loans. The scheme is due to close at the end of June and repayments will put yet more pressure on small business resources. The Chancellor may be moved to act in this area.

Surviving 2022 headwinds and how alternative finance can help

Whatever the Chancellor announces in the Spring Statement, it is clear that safeguarding cashflow and capital in 2022 will remain a challenge. How can small firms do it? Alternative finance can help.

In the wake of prolonged caution from traditional lenders, which is an issue that has returned during the pandemic, services such as invoice finance, asset finance and peer-to-peer lending, are proving a vital source of capital for small businesses, both for maintaining cashflow and for essential investment.

These facilities, which offer a more easily accessible and personalised approach to lending, are helping small businesses survive and target recovery and regrowth.

Furthermore, alternative lending is playing a prominent role in the government’s headline emergency support scheme, the Recovery Loan Scheme (open until the end of June 2022). Invoice finance and asset finance between £1,000 and £10 million per business are available under the initiative. This profile is helping cement the reputation of alternative finance in the business sector.

Managing cashflow in 2022 and small firm finance options

The Spring Budget comes at a pivotal time for small firms, not least as the impact of the Ukraine-Russia war on energy prices and fuel bills becomes clearer. The already significant pressure on cashflow looks could become even stronger. And this may trigger a reaction from the government. Regardless of what’s in the Chancellor’s red box, strong financial planning is vital and small firms need to be aware of all the financial options available to them, including the services of alternative lenders.

To find out more about A&T Business Associates services, contact Tony Hedger on 01903 602211 or tony.hedger@atbusinessassociates.co.uk.