Here are the week’s main news stories in the world of small business and e-payments:
Financial confusion holding back UK small businesses
Almost nine out of 10 small business owners admit feeling ‘overwhelmed’ by regulation when starting up. According to analysis from small-business software app Xero, three-quarters of UK businesses said that early growth was ‘stunted’ from the sheer amount of time and expense it took to become financially business literate. The research found that 63 per cent of small firms admitted to having less than one day’s corporate financial experience or business education prior to the launch of their business. Furthermore, 78 per cent of small-business owners had never submitted a tax return before starting up, with 66 per cent admitting they’d been hit with tax return fines.
Tax digitisation to bring £6.9 billion productivity boost for UK SMEs
Making Tax Digital, the digitisation of VAT in April 2019 will bring SMEs an annual benefit of £1.6 billion in London and £6.9 billion nationally, according to a new research report from economic consultancy Volterra Partners and accounting software provider QuickBooks. Over the next five years SMEs could see net gains of £46 billion in turnover and growth for the UK economy. The research forecasts that technology needed to become compliant will bring additional benefits that will boost productivity – for example, by enabling better cash flow and human resources management, and freeing up time for more productive activities such as sales, marketing and training.
One third of UK SMEs would change their Brexit vote
One third (34 per cent) of small-business leaders who voted for the UK to leave the EU in the 2016 referendum said they would vote for the country to remain if given the option to vote again. According to research by digital marketing agency Reboot Online, this can be partly explained by the fact that 69 per cent of leavers now believe the process of Brexit has been “much harder and more chaotic than anticipated”. This has created uncertainty, which in turn has slowed down business growth and investment. Just 31 per cent of British SMEs said the process has been exactly how they anticipated it to be.
HSBC tests e-wallet payments in Hong Kong
HSBC has begun beta testing of its PayMe e-wallet app for businesses, with 15 retailers in Hong Kong now able to accept payments from customers using the app. PayMe for Business is initially available to HSBC Business Banking customers in Hong Kong and offers a way to accept digital payments from PayMe users via a mobile device. Business accounts customers will be able to download a separate app that allows them to receive payments using QR codes, provide refunds and manage their takings. Business customers can also chat directly with HSBC representatives via the app.
UK challenger banks secure funding for SME products
Metro Bank, Starling Bank and ClearBank have been granted a total of £280 million from a fund that aims to boost competition in lending to small firms. The funds are from the Banking Competition Remedies (BCR) scheme that was set up last year to help start-ups and online-only banks win business from established rivals. After assessing bids for the funds, the BCR said it awarded Metro Bank £120 million, Starling Bank £100 million and ClearBank, which bid alongside business banking service provider Tide, £60 million. The money can only be spent on improving the financial products and services aimed at SMEs.
SMEs plan headcount increase in 2019
UK SMEs hope to grow their headcount by an average of 21 per cent over the next 12 months, according to new research from Opus Energy. Just over half intend to grow their business in terms of people, with some even predicting they’ll increase their workforce by 50 per cent. IT (39 per cent), health (33 per cent) and financial services (28 per cent) were the sectors expecting the most growth. However, half of retailers also expect to grow in 2019, at an average of 19 per cent, along with 69 per cent of manufacturers that expect an average growth of 14 per cent. Younger entrepreneurs are more ambitious in terms of growing their team, while women were more optimistic about growth opportunities than men.