Revenues in London are forecast to increase by £160,000 by 2025, compared to the £65,000 increase expected in the North, according to data from the Centre for Economics and Business Research commissioned by money service Everline.
In 2025, the average London small business expects to have revenues of £538,000, compared to Northern expectations of £263,000.
According to The Telegraph, regional businesses are being held back by a lack of investment in digital improvements. Of the 500 business owners and directors questioned across the UK, more than a third in the North said they dedicate only a fraction of their financial resource to digital activities such as buying and selling online, and plan to reduce or keep their online expenditure flat over the next 10 years. This compared to 22 per cent in the south.
Dennis Graves, who opened Mocha Chocolate Shop in Richmond, North Yorkshire, two years ago, said crippling taxes are holding small firms back from investing.
“We’ve now gone past the limit of the VAT threshold of £84,000, which means that for every hot chocolate of bar of chocolate we sell, we have to give 20pc to the Government. After rent, business rates and overheads, that doesn’t leave you with a lot for a wage – let alone to invest. However, we have recently invested some money in an online shop to boost sales.”
Separately, the report said the outlook is improving for small firms, defined as businesses with between one and 10 employees. Sales grew at an average of 3.7 per cent last year and hiring is also at its highest level since before the recession.
However, businesses are feeling more pessimistic about their long-term future, as 18 per cent of respondents said they didn’t expect turnover to increase at all between now and 2025.
“More needs to be done to encourage a similar decade of growth and instil confidence in our small business network, especially outside of London,” said Russell Gould, chief operating officer at Everline.
