The government should provide VAT relief for small companies to help them cope with rising business costs, the chief executive of business banking and financial services platform Tide has said.
Oliver Prill, who became chief executive in 2018, said small businesses are finding it extremely tough in the current economic climate and that the UK could see a huge number of small firms shut up shop as a result.
“We urge the UK government to help small businesses through the crisis by introducing VAT relief for them until the end of the full tax year,” Prill said.
“Small business owners are doing their best to keep their companies running, including getting help from their family and friends, but they need more support,” he added.
According to a survey of 1,170 Tide customers last month, one in five small firms fear they may not survive the year as costs soar.
A rise in fuel and energy prices dominated business’ concerns, while rising inflation and supply chain issues also worried small enterprises.
Around 70 per cent of firms surveyed said they had to increase their hours, while a third relied on friends and family to stay afloat.
West Midlands and the North East have been hit the hardest, with more than 30 per cent of small businesses in those regions stating they may be forced to close within the next 12 months.
Meanwhile, 28.1 per cent of business owners have had to take a job elsewhere to top up their income while one in 10 have been forced to cut staff.
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UK government should introduce VAT relief for small businesses