Pension auto-enrolment and EU referendum are businesses’ top concerns
The challenges of meeting auto-enrolment obligations and the possibility of the UK voting to leave the EU are the joint top concerns facing businesses in 2016, according to a new study.
The research, from insolvency and recovery professionals trade body R3, found that almost a quarter (23%) of businesses polled said they were concerned about the implementation of auto-enrolment pensions. The same proportion said they were concerned that a potential Brexit could have a significant financial impact on their businesses.
Other significant concerns included the planned introduction of quarterly tax reporting, which was cited by almost a fifth (19%) of respondents, followed by the National Living Wage (18%), the digitisation of tax reporting (11%), Universal Credit (7%) and the Apprenticeship Levy (6%).
R3’s Business Distress Index looked at 500 businesses from different sectors and of different sizes and found that the concerns held varied widely depending on the size of the business.
Large businesses, defined as those employing more than 250 people, were far more concerned with the prospect of the UK leaving the EU, with 44% of firms of this size saying they were worried about the potential financial impact. For micro-businesses employing between two and five people, meanwhile, the impact of the National Living Wage was the greatest worry.
More than half (56%) of all businesses surveyed expressed concern about at least one of the issues listed by R3. Again there were apparent differences depending on the size of the business. Issues that impact on business finance can have far flung consequences and can ultimately lead to insolvency or the need for recovery measures if not dealt with appropriately.
More than two thirds (69%) of larger businesses with 251-plus employees were concerned about at least one of the issues, compared to less than half (47%) of sole traders. Micro-businesses employing 2 to 5 people were the most likely to have three or more concerns (18%).
The study also found that 50% of all businesses expected their activity to increase over the next 12 months, with just 5% predicting a decrease. 50% also said they were more optimistic about the economy now than they were 3 months ago while 16% were more pessimistic.
By Phil Smith