The impact of Brexit, a rise in interest rates and the policy decisions and attitudes of both HMRC and banks, have been voted the three greatest threats to UK business survival over the next two years.
In a survey of the country’s insolvency and business restructuring professionals, the Institute of Chartered Accountants in England and Wales (ICAEW) predicted that these three factors represented the three greatest challenges to businesses going forward.
The impact of Brexit was considered by far to be the biggest threat to business survival in the UK, with 73 per cent of insolvency professionals claiming this would be the main cause of business deaths.
The Bank of England raising interest rates was considered the biggest threat to businesses by 56 per cent of insolvency professionals, whereas 43 per cent believed the actions and attitudes of HMRC and the banks posed the biggest threat.
The findings come as the ICAEW has warned business owners to prepare for potentially tough times ahead, with sharp rises in business costs likely for firms in many sectors.
Regional director at the ICAEW, Bob Pinder, encouraged struggling business owners to face up to their financial difficulties before economic circumstances became worse.
He said: “A change in attitude is critical in order to successfully avoid substantially increased corporate insolvencies – confronting business issues, rather than being ashamed of them.”
The ICAEW anticipated that certain industries would be worse hit by these economic threats than others over the next two years, with insolvency professionals widely agreeing that the retail sector would face the most difficulty.
Over two thirds of insolvency professionals surveyed (70 per cent) said they thought care homes and similar healthcare businesses would also be significantly challenged. The ICAEW has launched a new guide to support struggling businesses seeking recovery.
Pinder added: “Seeking the early help of restructuring and insolvency practitioners enables restructuring of finances, business processes or management to salvage many businesses and bring them back into profit.
“There is no shame in admitting you are struggling – getting help is the bold and right decision. The difference between businesses that survive and thrive and those that fail is how well they manage difficulties. Whilst a percentage of insolvency is unavoidable, many cases are not.”
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