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The UK\u2019s small and medium-sized businesses are bracing for cost increases this year, according to new research from iwoca<\/a> \u2013 one of Europe\u2019s largest SME lenders.<\/p>\n iwoca\u2019s annual SME Outlook<\/em>, based on a survey of SME owners, shows that mounting business running costs tops the list of pressure points going into 2025, with 42% of business owners listing it as a main concern. The looming threat of higher taxes under the current Government comes in close second\u2014a primary worry for two in five (40%) owners.<\/p>\n According to iwoca\u2019s research, leaders of the UK\u2019s small and medium-sized businesses are apprehensive about the wider economy and the Government\u2019s track record so far. Under half (45%) of SME owners think positively of the Government’s performance since entering office last summer.<\/p>\n When asked if the Government was matching or missing their hopes, two in five (41%) owners said the Government is failing to deliver on their positive expectations.<\/p>\n Frustrations with political representation and interest in the SME economy are also dampening firms\u2019 outlook. Seven in 10 (70%) business owners believe that politicians don’t take the needs of SMEs seriously. A similar proportion (69%) say that the Government is on the wrong track for supporting small and medium-sized companies this year.<\/p>\n Lagging on the global stage?<\/strong><\/p>\n SMEs\u2019 political and economic concerns are reflected in long-term doubt over the UK\u2019s international standing. Just half (51%) of the owners of small and medium-sized firms feel optimistic about the country\u2019s economic future.<\/p>\n Notably, two-thirds (66%) of SME leaders believe the UK is falling behind other global economies\u2014a rise of two percentage points from last year.<\/p>\n Confidence confined to individual outlooks<\/strong><\/p>\n Against the backdrop of an unstable economic situation, UK SMEs only feel bullish about their own growth going into 2025.<\/p>\n iwoca\u2019s survey reveals that a majority (71%) of SME leaders expect turnover to grow this year, with 8% expecting it to shrink. Hiring plans are expected to match these growth ambitions, as over half (55%) of SMEs plan to expand headcount this year.<\/p>\n Despite a gloomy view of the UK\u2019s economic resilience and political performance, some leaders of the UK small and medium-sized companies foresee a positive year for themselves: just over half (57%) expect to be personally better off at the end of this year.<\/p>\n Christoph Rieche, CEO and co-Founder of <\/strong>iwoca<\/strong><\/a>, said: <\/strong>“The number one mission of the Government is to \u2018kickstart economic growth\u2019. The UK\u2019s 5.6 million SMEs represent the backbone of our economy and they are telling us that the Government has work to do to gain their confidence. Business owners need a tax system that incentivises them to take investment risk and reassurance that policies will make inflation stay under control so they can deliver on their ambitions. Business owners have a number of rollercoaster years behind them, finally they are more positive again about their own near-term prospects, but there is a concern that the mixed economic outlook will dampen their success in the future.\u201d<\/p>\n Oli Perron\u2013\u2013founder of <\/strong>Lunch\u2019d<\/strong><\/a>, a catering company, delivering healthy lunches to businesses across London, Birmingham, Manchester, Bournemouth, and Dorset\u2013\u2013said: <\/strong>\u201cTax and inflation costs are beyond our control, forcing us to raise prices and focus on attracting more premium clients who can absorb these increases. Persistent high inflation would shrink our profit margins and slow growth, while rising energy costs this year pose an additional challenge. Despite this, we anticipate growth in both revenue and headcount. This optimism stems from our ability to leverage economies of scale and adapt by maximising the use of seasonal produce to manage costs. Ultimately, our growth will be driven by innovation rather than support from the broader macro-economic environment.\u201d<\/p>\n The post 2025 SME Outlook: Tax concerns and political uncertainty persist despite bold growth plans<\/a> appeared first on Accounting Insight News<\/a>.<\/p>\n