According to The Forum of Private Business, more support is required to help small businesses survive the impact of the global credit crunch. These calls coincide with the publication of new figures that indicate a significant rise in the number of failing businesses in the North West, as well as a rise in tax for smaller businesses.

Indicating a 21.4 per cent rise in the failure rate of small to medium-sized businesses in the North West, the figures in the Equifax Business Failures Report show that the region now has the worst rate of business failure in the UK. In comparison, the business failure rate for the UK as a whole went up by a less extreme 9.1 per cent.

The Forum of Private Business is a small business pressure group with more than 25,000 members. Phil Orford, who is chief executive of the forum, said that the statistics were unnerving because the North West has traditionally been a great place for small businesses. He said: “The north west of England has been the entrepreneurial heartland of the UK since the industrial revolution, and the region continues to drive innovation through the small business sector. This latest data indicates that North West businesses are suffering more than most.”

Mr Orford criticised the government for failing to support SMES, and urged MPs to consider the impact that corporation tax is having on small businesses. He said: “The government recently introduced tax increases for small businesses knowing that the country was experiencing a credit crunch. As a result, the region's small businesses will now have to fight harder than ever to remain profitable.”

The government’s new tax rules saw the lower tax rate of 19 per cent raised to 21 per cent, and there is a further raise planned for April 2009 that will bring the rate up to 22 per cent. Despite enforcing a rise in taxes for smaller businesses during this bleak time, the higher tax rate that is paid by larger companies was actually cut by 2 per cent from 30 per cent to 28 per cent.

Mr Orford said that these tax raises could have a potentially disastrous impact on every small business in the UK. He said: “The wellbeing of smaller UK businesses is also being seriously undermined, and all MPs should be aware that their business constituents are also being subjected to an unfair taxation policy.”

The Equifax report also indicated that the failure of small businesses in the East Midlands had increased by 20.9 per cent, as well as 20.3 per cent in Yorkshire and Humberside, and 18.2 per cent in the North East. Neil Munroe, who is director of external affairs at Equifax said that these statistics indicate that there is hard times ahead for small businesses. He said: “There are tough times ahead and it is clear that firms need to do more than ever to secure the future of their business and protect themselves from the risk of failure.”

One of the best ways for SMES to protect themselves against failure under the struggling UK economy is by having a strong small business website. By doing this, they’ll be able to generate new sales leads for their product or service on a global basis at a relatively low cost.

Source:

Manchester Evening News

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