SMEs reveal the biggest financial pressures they face

The 1.2% increase to employer national insurance (NI) contributions is the biggest financial pressure affecting SMEs currently, according to new research by Reward Funding.

Nick Smith, group managing director for Reward, comments: “As part of our ongoing SME research, we wanted to understand which business pain points and government polices are negatively affecting firms the most. The increase in NI contributions earlier this year has clearly caused a financial headache, impacting 74% of companies, closely followed by the continued burden of rising energy costs (68%). Escalating business rates, increased inflation and overall economic uncertainty is also proving challenging for over half of SMEs, whilst the National Living Wage increase to £12.21 is causing a significant dent to the finances of 42% of businesses we surveyed. In the current uncertain economic climate, strong cash flow management still remains pivotal for SMEs navigating many of these external financial pressures. Whilst the government has recently increased the VAT registration threshold and extended the Full Expensing scheme in a bid to ease cash flow challenges for many firms, more certainly needs to be done.”