1 in 5 Scottish firms fear rising payroll costs

Thousands of Scottish SMEs are expected to struggle with rising payroll costs in April 2022, according to the Association of Chartered Certified Accountants.

In a poll of accountancy professionals representing more than 8,000 Scottish businesses, accountants said 22% of SMEs in Scotland could struggle.

From April 2022, minimum wage rates will increase to £9.50 an hour for over-23s and National Insurance contributions will rise across the board.

Soaring inflation, rising interest rates, supply chain issues, and the energy crisis will pile more pressure onto businesses around the UK.

Scottish SMEs themselves remain optimistic, with only 7% predicting they will run out of cash in 2022/23, compared to the UKaverage of 21%.

Half (50%) of Scottish businesses are looking to grow in the first half of 2022, compared to the UK average of 38%.

Susan Love, strategic engagement lead at ACCA Scotland, said:

"While these results paint a more positive picture for Scotland, they also suggest that further challenges lie ahead for our small firms.

"Despite the aspiration to grow and create jobs, the mounting financial pressures placed on Scottish SMEs could tip many over the edge."

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