News: January 2016
Security risk in London key concern in 2016 for SME business owners
A survey from Robinsons, one of the leading SME accounting firms in London, has established that employee’s fear of traveling in London is one of the key concerns of SME business owners in 2016.
The finding came from a survey of 800 Shoreditch and North London based clients that were asked for the top ten issues that will impact on the performance of their organisation in 2016.
The survey also found that other concerns include: cost of rent and rates, tax and employment law changes and access to finance.
Joseph Robinson, Managing Partner of Robinsons, said:
“The financial pressure on SMEs in London is relentless and the natural rise in productivity is not keeping pace with third party costs. Businesses have to make tough decisions on their overheads whether that is reducing headcount, moving office or outsourcing activities. Outside pressures on employees such as cost of accommodation, cost of commuting and the rise in security fears are impacting on the ability to attract people to work in London.”
“We are seeing unprecedented change in the way SMEs operate and the relationship between clients and their accountants is changing. We have had to evolve and broaden our support to clients through becoming day-to-day business solution providers rather than solely experts on accounts.”
The top ten issues facing SMEs in Shoreditch and North London in 2016 are:
- Rent revues – typical rents are expected to rise 9% this year with some experiencing 50% rent revue rises.
- Business rates – rates have increased by 120% in past ten years and there is further fear of the impact of decentralised business rate setting.
- Attracting talent – cost of accommodation and travel is making it hard to attract people to work in London.
- Flexible working – having to accommodate requests but still paying for the overhead of 5 days a week.
- Automatic enrolment – rising pension contributions from both employee and employer will add pressure to labour costs.
- Lack of access to HMRC – tax office closure, low level of phones answered and the push towards online are all making it harder to sort out tax issues.
- Tough penalties from HMRC – penalties increasing as the process becomes more and more complex; Proposals for the quarterly filing of accounts, i.e. four times a year, are a prime example.
- HMRC intermediaries reporting – not understanding the rules and fines for non-compliance.
- Access to funding – although interest rates are low, lending criteria are much tougher and making it harder and harder to obtain finance.
- Security – staff are concerned at travelling into London, especially those who are not in London all the time.
Joseph Robinson, Managing Partner of Robinsons, continued:
“The regulatory and tax systems in the UK are getting tougher and more complicated adding to the stress levels of clients as they navigate the ‘so-called’ easy digital age of compliance.”
Two Robinson’s clients impacted by the financial pressure of being located in London have taken action to mitigate the risk and cost of working in London:
Adam Tarsh | Managing Director, Tarsh Lazare Recruitment, said:
“We closed our Central London office two years ago, and moved to a flexible structure basing our team in flexible workspaces for 2-3 days a week, the rest of their time based in home offices. Not only has this significantly reduced our cost base, but it has undoubtedly increased productivity rates across the team, and probably stress levels too!”
Nick Fellows, Hothouse Productions, said:
“The challenges facing SMEs operating in London increase year by year and we have found that applying radical thinking has allowed us to stay ahead of the game and absorb costs that are out of our control. We believe that outsourcing is the future and we have reduced our overheads considerably by outsourcing all of our finance function saving us office, labour and other costs associated with employing people in-house.”
Please get in touch if you would like to discuss how the issues above might affect your own business.