Here are the week’s main news stories in the world of small business and digital payments:
Two-thirds of small businesses feel unsupported by government
Two-thirds of small businesses do not feel the government is on their side, according to a report calling for a radical shake-up of the tax system. A YouGov poll for the Centre of Policy Studies think-tank shows 62 per cent of small business owners and managers don’t believe those in power are backing them to succeed. The findings are part of a report by Nick King, former special adviser at Sajid Javid, when he was business secretary, which calls for a reduction in ‘red tape’ for firms with an annual turnover of less than £1 million. For those companies, corporation tax, business rates, VAT and Employer’s National Insurance would all be replaced with a levy on turnover – dubbed the Simple Consolidated Tax (SCT).
Funding award to boost competition in small business lending
Nationwide Building Society, Investec Bank and The Co-operative Bank have been granted a total of £80 million from a fund set-up to increase competition for lending to UK small businesses. The Board of Banking Competition Remedies (BCR) is allocating £50 million to Nationwide, £15 million to Investec and £15 million to Co-operative Bank. The BCR was set up with cash from Royal Bank of Scotland as a measure to help boost competition in business lending – a condition of its bailout during the 2008 financial crisis. Earlier this year challenger lenders Metro Bank, Starling Bank and ClearBank were granted £280 million in the first round of grants from the fund.
Small business owners stressed and struggling to switch off
New research suggests small business owners aren’t doing a good job of coping with the stress that comes along with running a company. Small-business owners spend 17 full days a year worrying about business-related issues outside work, according to a survey conducted by OnePoll on behalf of GoDaddy. Meanwhile, 51 per cent of small business owners admit they have trouble switching off from work. In addition, 41 per cent say they often get pulled into business matters when trying to unplug.
Payments set to make greater use of AI
Payment processors are making wider use of artificial intelligence technology in an effort to better utilize their vast troves of data and connect more directly with customers. Artificial intelligence has long been used in banking and credit card systems to detect and spot fraudulent activity. Now, AI is making its way into other areas of the payments and financial services industries. AI in the payments industry is helping enhance customer service, provide hyper-personalised credit scores and offers, and drive new forms of transactions like stores with no cashiers.
Scottish SMEs receive £1 million in digital development loans
Small businesses in Scotland have been awarded a combined £1 million in digital improvement loans since June 2018. More than 20 SMEs have received a share of the sum, taken from the £2 million Scottish Government Digital Development Loan fund. The investment is part of a £36 million government initiative to help SMEs boost their digital capabilities and upskill staff. The latest company to receive funding, and whose award pushes the total past the seven-figure milestone, is Sand Monitoring Services (SMS), an Aberdeen-based firm that provides sensory data analysis and visualisation for the global oil and gas sector in the UK and overseas.
Business warns Labour over 'tit-for-tat' minimum wage hike
Businesses have warned that a "tit-for-tat" over the minimum wage could damage jobs after Labour leader Jeremy Corbyn confirmed proposals to extend the party's £10 minimum wage policy to 16 and 17-year-olds. Currently, workers under the age of 18 are paid a minimum wage of £4.35 an hour, compared to £8.21 for those over 25. The government reviews the minimum wage rates each year, under the advice of the independent Low Pay Commission. A Federation of Small Businesses (FSB) spokesperson said politicians from all parties “should not simply be competing in a tit-for-tat as to who can offer the most people the biggest hikes”, adding that FSB research shows the average small business has already seen £60,000 of increased annual business costs due to public policy changes since 2011.