SME News March 2018

SME NEWS / Q1 2018 19 Britain’s SMEs Facing Triple Challenge Warns CYBG in five companies employing 50-99 employees or 2-5 years old particularly feeling the strain, suggesting that the skills shortage is threatening the very companies that are likely to be disproportionately responsible for the UK’s future growth. Amongst those SMEs that have not been able to access the relevant skills, almost a third (32%) claim that they have been unable to grow their business due to the skills shortage. As CYBG’s Index shows, the net balance of SMEs operating below capacity increased in Q4 2017 largely as a result of the UK’s tight labour market where the unemployment rate is at a historically low 4.4% and employment at a record 75.2%. To help address these challenges, SMEs surveyed in the YouGov poll have identified a range of changes that could help alleviate the strain of rising business costs - around 20% of all SMEs believe that either a cut in VAT or further Corporation Tax relief would deliver the biggest benefit in the current climate. While the Government has already made changes to business rates to support SMEs, 20% of SMEs employing up to 100 people state that further business rate relief could help most to alleviate the pressure of increased costs (compared to just 11% of larger SMEs - 100- 249 employees). On skills, almost 40% of SMEs said that an incentive for employers to invest in existing employee training could help bridge current skills gaps. An equal amount suggested corporate tax incentives for training. Among the smallest SMEs employing up to 20 employees, 42% say they would like to see an increased personal tax allowance for individuals investing in their own training and skills development.