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Thursday
Oct012009

The Recession Has A Sting In The Tail, Say Small Businesses

Many small businesses expect the recession to have a sting in the tail despite figures showing that trading problems are easing, says a new study.

Bosses expect to face a triple whammy of higher taxes, more insolvencies and difficult trading conditions for some time to come as the effects of recession work themselves out of the economy The first three months of 2009 were the worst trading period ever for one-in-five small businesses (26%). More than half of businesses (57%) expect the recession to drag on until spring 2011.

Meanwhile, HM Revenue and Customs has revealed the real state of the nation’s finances by backing up Treasury forecasts that tax hikes are inevitable.

    * Income tax including national insurance, the biggest HMRC earner is forecast to fall by just under 10p% or £45 billion to £394 billion.

    * Stamp Duty will fall by 37% this year, £3 billion short of what was collected last year

    * Investors suffering losses mean capital gains tax will plummet by more than 70% from £7.8bn to £2.2bn

When asked what they would do differently if they had seen the recession coming, most businesses responded (43%) they would have put more emphasis on sales and marketing.

Almost a third (31%) said they would have laid off more staff quicker – with 45% of firms already having to sack staff during the first half of 2009.

Current priorities see 57% of firms trimming costs to improve sales while 43% are investing in website improvements.

Communications consultants Amplify carried out the research.

Stephen Alambritis of the Federation of Small Businesses (FSB) said: “It is hugely reassuring to learn that more small firms are investing in improving their website. As the home market struggles to recover it is important that businesses appeal to international patronage. 

“The global economy has meant the death of distance in commercial transactions and what better way to take advantage of this phenomenon than to invest in online collaboration.”

 



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