Umbrella company contractors may be concerned to learn that small business confidence collapsed in the third quarter, according to the Federation of Small Businesses.
The FSB runs a Voice of Small Business Index and after registering +0.3 at the end of Q2, it fell right back to -9.3 last quarter. As a result of such a dismal showing, the FSB has called on the government to make targeted cuts to VAT and extend the National Insurance holiday scheme for small businesses.
The national chairman of the FSB, John Walker, explained that it is hardly surprising that businesses are losing confidence when they are faced with rising costs and falling revenues. An unfortunate consequence is they have to lay off staff to compensate for the increased expenditure on overheads.
For the first time since the Index began, 5.8% more businesses think they are going to have to make staff redundant than hire them over the coming months. The government must take heed and develop a more robust growth plan, he continued.
Furthermore, for the first time confidence in all UK regions is now in negative territory and we urge George Osborne to carefully consider the NICs holiday proposal and implement this when he delivers his Autumn Statement on November 29th. Unless measures such as this are implemented, there is a very real fear that the economic recovery will falter, Walker concluded.
Despite the drop in business confidence, most small businesses expect their condition to deteriorate only slightly over the coming 12 months.
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