Have Small Businesses Got a Tough Year Ahead of Them


The Federation of Small Businesses (FSB) has hit out at HM Revenue and Customs (HMRC), after the tax office launched a new crackdown on thousands of small firms. Speaking to the Independent, FSB National Chairman John Walker warned that HMRC plans to target small and medium-sized enterprises (SMEs) with paperwork spot checks were only likely to add to the pressures already facing businesses and said it contradicted the government’s pledge to cut red tape. “We have spoken to HMRC and expressed our concerns about this a number of times. But as far as they and ministers are concerned it is a policy aim to make this happen,” he explained. “There is a huge difference between the rhetoric of the government about helping small businesses and what it is doing in reality.” Shadow Business Secretary Chuka Umunna insisted that HMRC must adopt an even-handed approach to both large and small companies, pointing out that the Public Accounts Committee recently expressed concern over its “cosy” dealings with big business. Conservative backbencher Priti Patel was also critical of the move, claiming many of her business-owning constituents had approached her with examples of “harassment” from HMRC. If that’s not enough, small business have also been warned this week that conditions are likely to remain turbulent over the coming year, even though confidence remains resilient. Forum of Private Business (FPB) Chief Executive Phil Orford insisted that small and medium-sized enterprises (SMEs) must be aided in their quest for growth if Britain is to avoid a double-dip recession.

However, he suggested there may be some cause for optimism as the new year gets underway. “Clearly 2012 will again be challenging,” he explained. “Confidence is low but, despite the difficulties they face, there is some optimism among small business owners. More than a quarter of our members surveyed recently plan to grow in the next six months.” Mr Orford pointed out that the impending Diamond Jubilee and the London Olympics could provide the UK’s small firms with a timely shot in the arm, and said some SMEs had recently reported some improvement in orders and turnover. Recruitment and Employment Confederation Chief Kevin Green last week predicted that small companies would be the driving force behind the British jobs market in 2012, despite ongoing weakness in the labour market. With working in this way allowing people to earn money in something they love without having to set up their own business, it looks at though the amount of freelancers will continue to increase for some time, or at least until the economy starts to settle down at the very least.