Small businesses across the UK are experiencing a surge in revenue, driven largely by a boom in ecommerce, according to the latest QuickBooks Small Business Insights survey. The quarterly survey, which covers small businesses in the US, Canada, the UK, and Australia, reveals a wave of optimism among UK enterprises despite ongoing economic challenges.
The survey shows that 28% of UK small businesses reported an increase in revenue over the past three months leading up to July 2024, a significant rise from 15% in January 2024. This growth is attributed to the expanding role of ecommerce, with 45% of businesses now generating more than half of their sales online, up from 41% in April 2023. Looking forward, 31% of businesses expect further growth in their online sales over the next quarter.
The data also indicates a reduction in cost pressures, with only 50% of businesses reporting rising operating costs over the past three months. This marks the lowest figure since the survey’s inception and suggests that more businesses are successfully converting revenue growth into profit.
As the autumn budget approaches, small businesses are expressing caution. There is speculation about potential changes to dividend tax thresholds, corporation tax relief, and other key tax policies, which could significantly impact their operations.
Pauline Green, Head of Product Compliance & Programs at Intuit QuickBooks UK, advises small businesses to take proactive measures ahead of the budget. “If you’re considering taking a dividend, it’s wise to do so before the budget, as thresholds may change,” she suggests. Green also recommends that businesses with spare cash consider reinvesting it or exploring available tax breaks, such as those for R&D and full expensing. Additionally, she advises businesses to ensure they collect outstanding payments promptly and review their tax year dates for possible cash flow benefits.
Green also highlights the importance of addressing Capital Gains Tax, especially for businesses considering the sale of assets due to shifts towards online operations or hybrid workforces. “If you’re thinking of selling assets, it might be prudent to act before any potential changes in tax regulations,” she adds.
David Bharier, Head of Research at the British Chambers of Commerce, comments on the findings: “It’s encouraging to see business confidence rising, particularly with increased revenue from ecommerce and easing cost pressures. However, challenges such as limited investment and global political uncertainties remain. The upcoming budget will be crucial for the Government to demonstrate its commitment to fostering economic growth and boosting business confidence.”
In summary, the QuickBooks survey highlights a positive trend for UK small businesses, marked by rising revenues and a growing reliance on ecommerce. Nevertheless, the uncertainty surrounding the forthcoming budget underscores the need for businesses to remain vigilant and prepared for potential changes in fiscal policies.