- Medium-sized businesses see growth potential in tax cuts and infrastructure investments.
- Micro-businesses face challenges from rising costs and tax uncertainties.
- Collaborative and flexible support is essential to bridge the SME divide.
Recent UK tax reforms and economic policies are driving optimism among medium-sized businesses, with over half seeing the reduction in business rates and fuel duty freeze as opportunities for growth.
Micro-businesses, however, face a tougher landscape. Challenges such as rising national insurance contributions and concerns over capital gains tax increases weigh heavily on them.
Bridging the Gap: Supporting Micro-Businesses in a Divided Economy
The recent budget has provided much-needed clarity for UK businesses, but its benefits are unevenly distributed. Medium-sized businesses are primed to capitalize on tax cuts and infrastructure investments, giving them the confidence to pursue innovation and growth. More than half of these firms see the new measures as essential to their expansion strategies.
In contrast, micro-businesses are struggling to keep pace. Rising operational costs, including national insurance and potential capital gains tax increases, are squeezing their margins. With 53% of micro-businesses citing these as barriers to growth, their ability to compete in a dynamic economy is increasingly constrained.
The disparity highlights the need for tailored support to address the unique challenges faced by smaller businesses. While medium-sized firms benefit from structural advantages, micro-businesses require flexible financing options, such as debt restructuring and seasonal fluctuation management, to remain viable.
Creating a balanced economy demands collective action from policymakers, financial institutions, and industry leaders. Only by leveraging the resilience of all business sizes can the UK build a sustainable and inclusive economic future.
Supporting micro-businesses with targeted measures is critical to fostering an inclusive economy. By addressing their challenges, the UK can unlock the full potential of its entrepreneurial ecosystem.
“There’s no ‘one-size-fits-all’ policy for SMEs – nor for their financing either.” – Mike Randall, CEO, Simply Asset Finance
