Are you planning to invest in your business this year?

Tuesday 24 June 2014

Limited companies and sole traders looking to remain competitive may want to think about increasing investment.

Research from the Federation of Small Business (FSB) showed 25.6 per cent of members intend to increase capital investment over the next 12 months. This is up considerably on the second quarter of 2013.

The FSB claims that this will serve to improve productivity, which will lead to higher wages and living standards.

For self-employed individuals looking to expand their business, the findings are a clear sign that now is the time to put money back into the organisation.

It was also revealed that small businesses are investing in staff, with five times as many companies intending to increase headcounts this summer, compared to the second quarter of 2014.

The FSB explained that small businesses have already played an important role in bringing the UK unemployment rate to the lowest levels in over five years. Indeed, the body has highlighted the importance of firms like limited companies in the economy and conditions are likely only to strengthen as confidence builds.

Indeed, 10.5 per cent of businesses expect to grow their headcounts over the next quarter, which could help to offset the decline in public sector employment

John Allan, national chairman of the FSB, said: "This data shows the economic potential of small businesses in 2014 – we are becoming stronger and bolder and getting people back to work. Small firms are bringing down employment faster than expected and helping our nation lead the global recovery.

"We still want government to prioritise support and help for small businesses – there is still much work to be done – we need to increase our exports, we need to address skills shortages and we need to improve access to finance."

Nevertheless, new government proposals could serve to support small businesses further. Announced in the Queen's Speech at the beginning of the month (June 4th), the small business, enterprise and employment bill will make it easier for small businesses to access finance, lower red tape and make it simpler for companies to operate overseas.

The bill is also expected to make it easier for small businesses to gain fair access to the £230 billion spent annually in public procurement contracts.

It is hoped the measures will further the UK's reputation as a "trusted and fair place to do business", supported by regulations to improve the visibility of who owns and controls British companies.

A National Insurance Contributions bill will also be introduced to simplify the levy by moving Class 2 contributions to self-assessments. The change, which takes effect from April 6th 2014, will see the tax take place alongside Class 4 National Insurance Contributions.

Additionally, legislation will be created to allow follower notices and accelerated payments in tax avoidance cases. This is hoped to help contribute to a fairer tax system for all.

However, the skills shortage still looms over the heads of businesses and many will no doubt fear that when the time comes to take the next step, the talent won't be available to do it.


By Victoria McDonnell

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