ONE in four (26 per cent) of small businesses will struggle to meet rising payroll costs in April due to the incoming health and social care levy increase in national insurance contributions as well as rising minimum wage rates
That's according to the latest SME Recovery Tracker from the Association of Chartered Certified Accountants (ACCA) and the Corporate Finance Network (CFN), which polls accountancy professionals on the financial outlook of their clients
It shows that mounting financial pressures - such as surging inflation at 5.4 per cent, interest rate rises of 0.25 per cent to 0.5 per cent, heightened supply chain issues, the energy crisis, complications gaining access to finance, and now the social care levy – are all causing severe interruptions to business operations and SMEs’ ability to survive or grow.
Caitriona Allis, head of ACCA in Northern Ireland, said: “This research reveals a very uncertain start to the new year for SMEs, countered with optimism about the long term for 2022.
“However, this essential progress can’t be achieved without the cashflow, and people to help them grow, or indeed the resilience to do this too.
“The government needs to seriously consider the economic implications of the planned hike in national insurance rates and the impact it will have on SMEs, who serve as a backbone to the UK economy. Ultimately, these figures point to the danger of businesses failing.”
