A statement against small businesses?

The news was dominated yesterday and again today with the impact of the Autumn statement and how it sought to rectify the previous Truss/Kwarteng 'have a go at economics' disaster. And many, including high profile local accountancy firms were calling the Chancellor's plans 'the most transparent and honest budget in recent memory'.

It's said there's always winners and losers in every budget and always a roll of the dice as to which camp you're going to be in. But talking to local businesses, this mini budget felt like a loss for everybody and I'll tell you why.

The life blood of the UK economy is the SME and more accurately the micro business. Something like 90% of the registered companies in the UK employ less than 10 people. One of the most encouraging things about the UK economy has been a thriving start-up culture and a strong entrepreneurial spirit of people who wanted to carve their own way in the world and build rather than simply take employment.

You'd think then that the UK would be highly supportive of this thriving ecosystem that has been slowly replacing the UK's lost manufacturing industries over the past 50 years. You'd think they'd understand the high possibility of risk that faces small businesses and the huge challenges each one has to navigate to achieve success, so you'd think they'd try to lower barriers and increase rewards. But that doesn't seem to be the case.

On top of the increased costs of energy prices, minimum wages, higher fuel costs, increased material prices, additional costs to sell to or buy from Europe, a reduced labour market and 2 years of turbulent trading through a pandemic to deal with, you're then presented with the Everest of problems to climb - tax, tax, tax.

That small business will likely pay business rates, it'll pay vat, it'll pay fuel duty, it'll pay insurance premium tax, it'll pay employers national insurance, road fund licence for vehicles, a statutory pension contribution and then of course all the stealth tax that comes with inflation at 11%+ (which is really at 20%+). And all of that is before you make enough money to actually pay yourself.

The owners/directors will then pay national insurance and likely income tax, then if they reach the glorified stratosphere of actually being able to take a dividend as a reward for all the risk, the hours, the stress and the uncertainty of running a business then that'll be a minimum of 19% corporation tax on your profits and then the equivalent rate of 8.75% tax on the dividend itself.

And then heaven forbid, you actually get to the point of having a business worth selling, well of course there's a tax for that as well and you'll be paying 10-20% capital gains tax.

So faced with all of the above, and the tightrope that so many businesses are walking after covid trying to find their feet and gain some stability. What do you think were the key features of the Autumn Statement?

• Minimum wage increases
• Dividend tax increases
• Capital gains tax increases

The budget was said to rightly try and support those who were most effected by raising costs of living, but what I think the Government have really misunderstood is that many of those at risk of ending up in poverty are workers employed by businesses that are straddling a very fine line indeed.

If an employee can't afford an inflationary increase in their mortgage interest rate from 2% to 4% whilst employed they're certainly not going to be able to afford it whilst on job seekers allowance. That's the real risk the UK is facing, mass unemployment of professional people as those small business owners look at what is being stacked up against them and they decide to close shop because the rewards no longer outweigh the risks.

All the time the largest most profitable businesses of course structure themselves in tax havens ensuring they pay little to no UK tax. That would be the same global businesses closing stores on every high street that can't compete on price. Which is not that surprising when one can't move without being taxed and the other doesn't pay tax at all.

So was this an 'honest and transparent budget' or was it a budget that protected the uber wealthy, protected the global corporates and instead hit at the heart of UK businesses the SME. The same businesses not yet recovered from the pandemic or of course the B word are now the ones being squeezed of every last drip, but hey at least they're doing it transparently.