Another month, another mini-Budget and the early signs suggest the 2022 Autumn Statement won’t be a good one for under-pressure small businesses. What can these firms expect and how can they survive in 2023?

Should small businesses expect tax rises?

The days of the comparatively pro-small business Truss-Kwarteng mini-Budget already seem a long time ago. On November 17, the chancellor will give the latest Tory government’s Autumn Statement. Current discussion points to a far less friendly set of measures for smaller firms.

While there is plenty of time for minds and policy planning to change, and for the tone of speculation to alter, at the moment coverage is focused largely on tax rises.

It is being reported that small business owners must steel themselves for a series of increases, including in the tax on company dividends and the headline rate of capital gains tax. In addition, the increase in corporation tax, which had been scrapped, is due to be reinstalled, with the rate rising to 25% from April 2023.

At the same time, small businesses face the prospect of rising business rates, which are due to increase in line with inflation. The Bank of England has forecast that inflation will reach 13% by the end of 2022, which could cause a 10% in rise in business rates. According to the British Retail Consortium, this could mean businesses have to pay an extra £800 million in 2023.

Some sectors, including retail, have enjoyed a temporary 50% relief from business rates and as such, all eyes will be on the chancellor to see if this is extended in the Autumn Statement. Given the tone of the forecasting to date, it seems fair to say that it would come as a surprise if it was.

Safeguarding cashflow and how alternative finance can help

The recent political and economic chaos has created a near-debilitating sense of uncertainty for small businesses, with a lack of clear economic policy making it very difficult for firms to plan ahead and raising yet more fears over market conditions going forward. This underlines the need for these companies to have the right planning in place and at times like these, ensuring access to capital is a critical part of this strategizing. This is where the services of alternative lenders can help.

In the wake of prolonged caution from traditional lenders, which is an issue that has returned during the pandemic and amid challenging market conditions in 2022, services such as invoice finance, asset finance and peer-to-peer lending are proving a vital source of capital for small businesses.

These facilities, which offer a more easily accessible and personalised approach to lending, are helping small businesses survive and target recovery, stability and growth. Notably, alternative lending has played a prominent role in the government’s headline emergency support schemes, including the Recovery Loan Scheme. This profile has helped cement the reputation of alternative finance in the business sector.

Surviving in 2023 and small firm finance options

Will the Autumn Statement bring yet more hardship for small businesses? While current speculation suggests so, Tory government u-turns are far from rare occurrences these days and any stringent measures could be shelved. But it doesn’t look good. With survival in 2023 at stake, it is vital that small firms take a proactive approach, including making sure that they aware of all the available funding options.

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