Half of small businesses call for Government to introduce energy grants in emergency Budget

5

min read

Half of small businesses call for Government to introduce energy grants in emergency Budget

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  • Almost half (47%) of SMEs want to see the Government introduce energy grants, as the ‘cost of doing business’ reaches record highs
  • Business owners are also asking for tax cuts in the Budget, including reversals of both the proposed increase in corporation tax rate for businesses (36%) and the rise in national insurance (35%)
  • More than two in five SMEs (43%) say the business environment is worse than it was a year ago, and respondents are split over whether conditions will improve next year

Nearly half (47%) of small business owners want to see the Government introduce energy grants, as increases in fuel prices threaten to cause them damage in the run-up to winter.

Second on SMEs’ list of policy priorities for the economy is an additional windfall tax on energy companies; two in five (41%) are calling for the ad hoc levy. Other key measures small businesses want introduced to mitigate the effect of energy bills include tax-deductible work from home costs like heating and lighting (30%).

With concerns over energy prices dominating the top of the list, in third place was cutting income tax, with 39% of businesses asking for this.

Small businesses call for tailored Budget support

With tax issues playing a central part in the Conservative leadership contest, small businesses told iwoca they’re looking for fiscal cuts for businesses in the Budget. As they grapple with higher monthly costs and cash flow restrictions, over a third of SME owners surveyed (36%) are calling for the proposed increase in corporation tax rate to be reversed, and a similar number (35%) want the same for the increase in national insurance.

Business environment even tougher than 2021, SMEs say

More than two in five small business owners surveyed (43%) say the UK business environment is worse than it was a year ago. By contrast, fewer than one in three (29%) small business owners think the business environment is better than it was last year.

Looking forward, more than one in three (34%) small business owners feel confident that the business environment will improve in the next year. A similar portion (33%) report feeling unconfident in an improvement in business conditions, reflecting the uncertain economic times the country is facing.

Cory Greenhough is the Managing Director of an online commercial refrigeration and catering equipment company, FFD. He uses iwocaPay, our B2B BNPL product, and told us: “A retail customer spoke to me the other day about how his energy bills have gone through the roof. We sold him an open-fronted fridge (where consumers can grab-and-go drinks and sandwiches etc.). They’re not particularly big pieces of equipment – his was about 1.5 metres. It’s currently costing him £10 a day to run these, per unit. He has two. So that’s about £600 a month just to run two small chillers.

“That’s before anything else – switching his lights on, paying his staff, his rent, his business rates – all of the rest of it.

“So even if you base it on the consumer cap increases, in October that’d go up to £18 a day, per fridge – so over £1,000 a month for the both of them. But there’s no cap on business electricity.

“In the past people have just thought about the cost of the piece of equipment, not the electricity they’ll need to run it. So now we’re now trying to educate customers about the most energy-efficient products they can buy.

“It’s really sad to think, but at this current rate, I think in a year's time a lot of businesses – say your local gastropub in the country – won’t have survived this energy crisis.”

Christoph Rieche, iwoca CEO, said: “The next Government must have its eyes firmly fixed on support for small businesses, who are currently unprotected from soaring energy costs. It’s critical that the Budget carries a range of solutions for SMEs who are being disproportionately hit by current economic turmoil.”

See the full data set below.

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Data

Which of the following policies would you like to see introduced by the Government to help the economy?

  • Expanding grants for support with the cost of energy: 47%
  • Implement an additional windfall tax on energy companies:41%
  • Bringing forward a cut on income tax:39%
  • Increasing taxes on high earners: 33%
  • Increase universal credit rates or making the taper more generous: 26%
  • Expanding tax credits for consumers:18%
  • The introduction of a VAT deferrals policy: 17%
  • Increasing pension tax rate relief:14%
  • None of the above: 11%

Which of the following policies would you like to see introduced by the Government to support small businesses?

  • Reversing the proposed increase in corporation tax rate for businesses: 36%
  • Reversing the proposed increase in national insurance: 35%
  • Allow for tax-deductible additional costs that employees who work from home incurred, such as heating and lighting the workroom (similar to the policy that was introduced during the pandemic): 30%
  • Introducing commercial rent controls for small businesses: 27%
  • The reintroduction of a Government backed loans similar to the covid-loan scheme: 26%
  • Raising the threshold business rates relief: 25%
  • Increasing the funding threshold from £5,000 to £10,000 for the Help to Grow scheme: 25%
  • Tightening regulation on late payments: 15%
  • Increasing the diversity of lenders beyond high street banks: 13%
  • Increase the Plug in Grant scheme threshold for businesses from £1,500 to £3,000: 13%
  • Extending the supraduction regime beyond 2024: 5%
  • None of the above: 11%

How confident are you that the business environment will improve over the next 12 months?

  • Very confident: 10%
  • Confident: 24%
  • Neither confident or unconfident: 32%
  • Unconfident: 20%
  • Very unconfident: 13%
  • Don't know: 3%

Do you think the business environment is better or worse than it was 12 months ago?

  • Much better: 5%
  • Slightly better: 24%
  • Neither better nor worse than 12 months ago: 28%
  • Slightly worse: 29%
  • Much worse: 14%

Charlotte was a UK PR Manager at iwoca. She's been sharing news and insights about the finance industry for over four years.

Article updated on:
September 6, 2022

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