The Federation of Small Businesses (FSB) is calling on the Government to start thinking about its Christmas policies following the latest Small Business Index (SBI) results.
The research shows that small firms in both retail and accommodation and food sectors had a far lower confidence reading than businesses from all sectors, at -38 points and -36 points respectively, against an all-sector finding of -14 points in the second quarter of 2023.
The UK’s largest business group has released a Tinsel List of policies – following a challenging three years of dealing with Covid-19, energy hikes and soaring interest rates and inflation.
Policies in the Tinsel List include:
· High streets must be easily accessible, with available parking, and increasing park and ride. Local transport must be reliable, affordable and well connected – and the Government must ensure its Pothole Fund is fairly allocated.
· Raising the VAT threshold from £85,000 to £100,000 could spark growth across the economy. Many firms halt trading near the end of the tax year to avoid hitting the current limit and incurring additional costs.
· The Small Business Rates Relief threshold should be increased to £25,000 to remove 200,000 small firms out of the rates system.
· Cheaper energy costs – energy firms should more widely adopt FSB’s proposal to allow small firms that negotiated their contract at the height of the energy crisis last year to be able to ‘blend and extend’ their contracts to take advantage of lower, wholesale prices. Lower energy bills will allow firms to keep their prices low for consumers.
· Reinstate tax free shopping for international visitors, to add £4bn of GDP through increased retail and tourism, secondary spending and small producers – and signalling that the UK is open for business.
FSB National Chair Martin McTague said: “As we approach the end of summer, it’s essential to look ahead and prepare for the upcoming festive period. Although this may appear distant, preparation is key to capitalising on the opportunities that lie ahead.
“We expect a significant influx of tourists, driven by their intent to purchase Christmas gifts, experience festive markets and indulge in traditional holiday fare. Historically, the UK has been a favoured winter destination, and this year is no different.
“It’s crucial to consider the financial pressures small businesses are facing. Implementing measures to alleviate business costs can lead to more competitive pricing.
“This year has seen the economy navigate various challenges and now presents a timely opportunity to offer support, ensuring a positive conclusion to the year.”