Only 9% of UK entrepreneurs plan to start a business this year

Despite the government’s ambitious growth projections for 2023 and beyond, just 9% of UK entrepreneurs plan to start a business this year, according to a new survey.

The study found that trust among prospective business owners was much lower than in recent years, with the government providing strong support and implementing plans that included extending the energy cap and introducing new support loans. indicates an urgent need to Specifically, the energy bill and the introduction of a windfall tax on energy and fuel companies.

However, despite the difficult economic climate, the survey found that the UK’s entrepreneurial spirit remains intact, with more than half (54%) of respondents agreeing that challenging economic conditions, continued energy Nonetheless, he said he dreams of starting his own business. Crisis and soaring inflation.

The study also sheds light on the current state of entrepreneurship in light of the economic climate, delineating pressing concerns over the cost of living crisis and confusion over government communication on policies affecting entrepreneurs such as the ITSA’s MTD. clarifying.

Emerging entrepreneurs held back by economic stability

Unsurprisingly, the ongoing economic instability has played a key role in deterring some Brits from starting a business, with a quarter saying troubling concerns about the UK’s current economy. , cited as the main reason for not expanding the business.

In addition to financial concerns, those who said they didn’t want to start a business cited cash flow concerns and rising energy bills as the main reasons for delaying their ambitions.

Comparing the results to the previous year, potential entrepreneurs cite the same top reasons for wanting to create their own business. This suggests that motivation has not changed and remains a major factor in why Britons want to become entrepreneurs.

Additionally, 31% of respondents said they would like to work in line with family commitments. This reasoning was significantly higher for female respondents than for male respondents.

Awareness of ITSA’s MTD grows despite government communication turmoil

More than half of aspiring entrepreneurs are still unaware of the upcoming changes to the Digitalization of Taxes (ITSA’s MTD) for Income Tax Self-Assessment and what needs to be done.

The government recently announced that a law requiring all business owners to digitally file quarterly reports on business income and expenses, rather than annual self-assessment tax returns, will take effect in 2026 instead of 2024. announced. of respondents said they were completely unaware that the deadline had been extended.

The results suggest that governments must continue to strengthen communication and education about policies, so that new entrepreneurs are well informed about new laws long before they need to comply. must be

FreeAgent CEO and co-founder Roan Lavery, who commissioned the study, said: It is clear that economic instability and the ongoing cost of living crisis are having a significant impact on aspiring UK entrepreneurs, and our survey calls into question whether the government’s growth targets are realistic. I’m here.

“It is not enough to acknowledge that the current economic climate is making it difficult for small business owners to thrive. Governments must take decisive steps to foster the small business sector. includes developing policies to inspire and support emerging UK entrepreneurs.

“I would like the government to prioritize simpler and lower business taxes for freelancers and small businesses, crack down on tax evasion and tax evasion from multinationals, and introduce more statutory protections for the self-employed. It is important that we do all we can to support this important part of the economy and pave the way for recovery in the years to come.”