The rising day-to-day costs of running a business in the UK are hindering growth for many small and medium-sized enterprises (SMEs), by having a negative impact on business confidence and forcing firms to scale back on their expansion plans, a new study suggests.
According to research carried out by CYBG, the holding company behind Yorkshire Bank and Clydesdale Bank, in collaboration with the Centre for Business and Economics Research (Cebr), confidence among UK SMEs has fallen by almost half (48 per cent) since 2014.
David Duffy, of CYBG, said that a combination of “rising business costs alongside continuing skills shortages” was to blame for this – with recent changes to business rates and other costs proving to be not quite enough to support small firms.
“The Government’s business rate changes in last November’s budget were appreciated, but in the current environment, SMEs would welcome more incentives to address skills shortages or further tax reductions to manage costs and restore confidence,” he said.
“Businesses are scaling back their investment and borrowing due to the wider economic uncertainty, contributing to the decline in the SME Health Check Index.”
CYBG’s survey indicated that many SMEs felt they could benefit from greater incentives and tax cuts.
In particular, 40 per cent of SMEs quizzed said that if the Government introduced an incentive for employers to invest money in training their existing employees, this could prove hugely beneficial in bridging their skills gaps.