Here, Emily Coltman, chief accountant to cloud accounting provider FreeAgent, looks at the experiences of micro business owners in Britain to find out what it was like to run a small company in 2016.
It’s pretty common to read about small businesses, but it’s a lot rarer to hear about micro businesses, the smallest type who either have no employees or only employ up to ten people.
In reality, micro businesses make up a staggering 95 per cent of all businesses in the UK – that’s over five million people whose unique challenges aren’t often talked about in the media.
In 2016, FreeAgent, asked freelancers and micro business owners what it was really like to run the smallest kind of businesses in the UK. Over 500 people replied, weighing in on everything from Brexit and funding to work/life balance and the government’s digital tax proposals.
Here is a reflection on some of the findings:
The majority of micro business owners were against Brexit
Back in June – before the referendum even took place – FreeAgent discovered that nearly three-quarters of survey respondents were not in favour of the UK leaving the EU.
In addition, 72 per cent said that they thought Brexit would have a negative impact on the UK economy, while just five per cent said that it would be beneficial for their business.
However, this clearly had little effect on the result of the referendum itself, with a slender majority of voters opting for the UK to leave the EU.
Many micro business owners didn’t know about Making Tax Digital
Making Tax Digital is a flagship proposal by the government to fully digitise tax by 2020 and essentially put an end to the traditional tax return (there was a consultation about the plans in the second half of 2016 – read FreeAgent’s take here).
However, while those who were aware of the plans were generally positive about them, nearly half of those surveyed said they didn’t actually know what Making Tax Digital was.
Most micro businesses don’t start up with government funding
Although the government revealed figures earlier this year showing that the Start Up Loans Company had reached total lending levels of £250m, FreeAgent’s survey showed that the overwhelming majority of small business owners do not rely on any kind of government funding to help cover their startup costs.
Instead, nearly half started with no funding whatsoever, while 43 per cent used personal savings to bankroll their startup costs.
Most micro business owners think the UK tax system benefits big businesses
In the wake of the European Commission deciding that Apple needed to pay the Republic of Ireland €13 billion in tax, FreeAgent revealed that the nearly three quarters of survey respondents said they thought the tax system benefited big businesses more than smaller ones.
A good work/life balance comes at a price
While three quarters of people surveyed said that they felt they had a good work/life balance, many still had to work long hours with no time for a proper break.
Nearly a third of respondents said they worked over 48 hours per week on their business, while 44 per cent said they hadn’t felt in a position to take a holiday in the last six months.
2017 survey now open
FreeAgent is currently collecting responses for its next report, so if you’d like to be represented, take the survey now to add your voice.
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