Small businesses squeezed further as business energy support slimmed

The Chancellor has laid out new plans for business energy support beyond April 2023, with many energy-intensive industries and small businesses set to feel the pinch. Lee Murphy, managing director of The Accountancy Partnership, says: “Many small businesses now face a squeeze on their already tight margins, putting further pressure on profits as they start the New Year. Small businesses cannot absorb overhead price increases as easily as larger firms, and face being put at a further competitive disadvantage through no fault of their own.

“While many businesses have made changes to reduce their energy consumption there is only so far this can be pushed without compromising the product or service. The new support from the government is welcome but more must be done to protect Britain’s 5.5 million small businesses from potential closure. With insolvencies already at new year-on-year highs, a perfect storm of poor conditions could put otherwise viable companies out of business.

“SMEs make up 99% of the total number of businesses in the UK and employ almost two-thirds of the working population, their value to the economy shouldn’t be underestimated. SME-owners can keep a close eye on cash flow and manage what is coming in and out after April when the changes take place.”