79 FSB The UK’s gift industry is powered by small businesses – from artisans crafting bespoke products to independent retailers curating the perfect collections for their customers. But the road to starting and sustaining a business is tougher than it should be. The pandemic led to a net contraction of nearly 500,000 small businesses, a loss that we cannot afford to ignore. Restoring that number will not happen overnight, which is why the Federation of Small Businesses (FSB) is leading calls for a total of six million small businesses by 2028. Self-employment is the key to turning creativity into commerce. Two thirds of entrepreneurs cite independence as their main motivation, while 53 per cent seek a better work life balance – but passion alone doesn’t pay the bills. OUTDATED TAX SYSTEM One major barrier is the outdated tax system. Many gift business owners start with a side hustle, testing their products in markets, online platforms, or pop-ups before committing full-time. But the tax-free trading allowance has been stuck at £1,000 for seven years, failing to reflect the realities of modern business. Renaming it the Side Hustle Allowance and doubling it to £2,000 would make it easier for entrepreneurs to transition from part-time passion to full-time success without facing unnecessary penalties. Universal Credit is also meant to help, but its structure does the opposite. Self-employed claimants are assessed monthly, ignoring natural income fluctuations. A seasonal business might earn nothing one month and double the next but still be penalised. Extending the start-up period from 12 months to two years and switching to quarterly assessments would give entrepreneurs the stability they need in these critical years. The challenges extend to self-employed parents. Unlike employees on Statutory Maternity Pay, self-employed parents receive lower Maternity Allowance. This is unfair. Aligning it with Statutory Maternity Pay for the first six weeks and scrapping the punitive classification would create a more level playing field. GOVERNMENT SUPPORT Government support should also help more people move from benefits to business. The New Enterprise Allowance needs to be relaunched in an updated form. Introducing a New Traders Allowance would provide new entrepreneurs with a financial cushion, preventing them from falling into hardship while they establish their business. Britain’s gifting industry is built on innovation, dedication, and entrepreneurial spirit. It’s time for policies that reflect that reality, ensuring that those who bring creativity to the high street and beyond get the support they deserve. FSB’s Tina McKenzie looks at how to navigate the bumpy road from starting, to sustaining a business A BUMPY ROAD ABOUT FSB As the UK’s business support group, FSB is the voice of the UK’s small businesses and the self-employed. Established over 40 years ago to help its members succeed in business, FSB is a non-profit making and non-party political organisation that’s led by its members, for its members. As the UK’s leading business campaigner, FSB is focused on delivering change which supports smaller businesses to grow and succeed. FSB offers members a wide range of vital business services, including access to finance, business banking, legal advice and support along with a powerful voice in Government. Each year FSB also runs the UK’s Celebrating Small Business Awards. More information is available at www.fsb.org.uk. You can follow us on twitter @fsb_policy and on Instagram @fsb_uk.
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