PracticeConsultingFears for future of small businesses revealed by English ICA survey

Fears for future of small businesses revealed by English ICA survey

Accountants fear the economic health of Britain's small businesses may be diverging from that of the economy as a whole, according to a survey of members by the English ICA.

A survey has revealed that 66% of respondents believed it would be harder for small and medium sized enterprises to survive in 2000 than 1999, despite a expectation of overall economic improvement.

Reasons for this concern included fears over tax rises, interest rate rises, the strong pound, excessive regulation, skills shortage and employment costs.

56% believed that the tax burden on small businesses would increase;

85% thought interest rates would be higher by the end of the year;

52% saw Sterling strengthening against the Euro;

Over 90% felt new legislation and regulation would be a negative influence on business profitability;

81% considered that skills shortages, and 83% considered that employment costs would have a negative impact on business.

Concerns were particularly strong for the retail and manufacturing sectors.

These views were in stark contrast to a majority (53%) perception that the overall condition of the economy will improve in 2000 with e-commerce, and financial services being two of the main drivers.

Commenting on the results, Robin Vaughn of the institute’s Board for Chartered Accountants in Business said: ‘Through their work at almost every level of UK Plc, Chartered Accountants can offer a unique insight into the nations economic prospects. The message we’re getting from our members is that optimism about the general state of the economy is tempered by high – and rising – concern over the burden placed on SMEs.’

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