The survey highlights growing confidence among UK small businesses, with many predicting continued expansion despite economic challenges.

Key Findings:

• Revenue Growth: 28% of UK small businesses reported increased revenue in the three months leading up to July 2024, a jump from 15% in January.
• Ecommerce Boom: 45% of respondents stated that over half their sales come from online channels, up from 41% in April 2023. Moreover, 31% expect further ecommerce growth in the coming months.
• Lower Cost Pressures: While 50% of businesses reported rising operating costs in the past quarter, this marks the lowest level since the survey began, suggesting more companies are turning revenue growth into profit.

As the autumn budget approaches, small businesses are cautiously monitoring potential changes to tax policies, including dividend tax thresholds, corporation tax relief, and employment allowances, all of which could affect their operations.

Pauline Green, Head of Product Compliance & Programmes at Intuit QuickBooks UK, shares her key considerations for small businesses:

1. If you are looking to take a dividend, pay it now, in this quarter. Don’t wait until after the budget in case thresholds change. 
2. You are still entitled to EU grants but paperwork can be challenging. Speak to your accountant about applicable grants and seek their expert support in accessing them. 
3. If you have spare cash, re-invest it into the business or other assets. If you pay corporation tax, take advantage of the tax breaks available under R&D and full expensing. You’d be surprised what purchases might be covered.
4. Get owed cash back into the business. Stick to the invoice terms you set out and if customers aren’t adhering to them, you are legally entitled to add interest. If it’s a customer that’s late paying all the time, set dynamic pricing. 
5. Review your current tax year dates. Ask your accountant whether there would be any cashflow benefits to changing the timings of your tax year ahead of the budget.

Pauline continues: “Our research suggests an, albeit fragile, confidence in the outlook of small businesses in the UK, with a record number reporting rising revenues, especially from ecommerce, and easing cost pressures.

“This growing confidence, however, has the potential to be somewhat thwarted with the forthcoming budget, amid speculation of changes to current allowances, thresholds, tax reliefs and taxes.”

David Bharier, Head of Research at the British Chambers of Commerce, adds: “Business confidence has been gradually ticking up in recent months and it’s good to see further evidence from Intuit. Our own data has shown that concern about external factors such as inflation has begun to fall. 

“However, a lack of widespread business investment continues to be a key challenge, and global political uncertainties are still weighing down on the ability of firms to spend.

“The forthcoming budget will be a critical moment for the Government to outline its commitment to economic growth and build business confidence further.”