There’s been a raft of measures over the last year or so which have added time and money to bottom line. Rising minimum wages, abolition of Directors tax free dividends, lowering thresholds for NI, recent hikes in fuel prices and the new rules on tribunals and time off for employees this year will make it increasingly difficult to persuade people to work set hours, or manage long term absences. The net result is that many small business people are deciding it isn’t worth battling on. Maybe that’s what government really wants, a nation of State dependants?
Here’s the word;
Todd Davison, MD of Purbeck Insurance Services says: “The latest insolvency datai) paints a worrying picture for UK SMEs, despite a slight easing in the annual trend. The rise in CVLs highlights the ongoing cashflow pressures facing small businesses. Many viable businesses remain under significant strain from inflationary pressures, higher borrowing costs, and reduced consumer demand.
“At Purbeck, we are particularly concerned about the increase in voluntary liquidations, which often indicate that directors feel they have exhausted all refinancing or turnaround options. With the number of compulsory liquidations also sitting below last year’s levels, it is clear that directors themselves are choosing to close their companies before matters escalate further.
“Demand for personal guarantee insurance continues to be strong, as owners look for ways to manage the personal financial exposure that accompanies new lending. In the current environment, directors are trying to balance the need to fund their business with the risk of personal liability should the business fail.
“We urge SMEs to seek early advice—whether from lenders, advisers, or specialist providers—before financial pressures become unmanageable. The earlier support is sought, the better the chances of stabilising the business and protecting both the company and its directors.”
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