A slowing global economy, a rise in late payments, increased costs and the uncertainty of Brexit are impacting on the confidence of businesses, according to Cumbrian accountancy firm Lamont Pridmore.

The Business Confidence Monitor for the latest quarter shows that confidence remains fairly negative, with political uncertainty and a potential no-deal Brexit of most concern.

This has been compounded by GDP growth forecasts for the UK which look to be weak, which is also partly the result of an overall slowdown in the world economy.

Graham Lamont, chief executive of Lamont Pridmore, said: “Inaction during uncertain times can be as dangerous as over-investing. Sitting back and hoping that things get better just simply is not an option and businesses should be doubling their efforts to plan for the future.”

He added there were always factors outside of a business’s control to contend with and although there are particularly challenging times, he believed with the right advice companies can still succeed.

He said: “I suspect that things may get worse in the coming months before they get better when it comes to profitability.

"A sudden departure from the EU in the event of a no-deal may push up the cost of raw materials from the continent and complicate some customer and supplier relationships.

“That is why firms should be looking at ways of making their business more profitable now and should be reaching out to suppliers and customers to put arrangements in place."

The ICAEW research also showed that capital investment among UK businesses was still very weak, with few investing funds into new projects, services or products.

Lamont Pridmore said that this may be a slightly short-sighted approach to take considering the allowances and tax relief on offer to those who invest in their own business.

Chris Lamont, a partner at Lamont Pridmore and managing director of the firm’s office in Carlisle, added: “Businesses can currently access up to a million in tax relief on money they spend on certain types of plant and machinery via the Annual Investment Allowance, while R&D tax credits allow small businesses to recover 33p in every pound that they spend on research and development that achieves an advancement.

“There are also hundreds of grants available, which businesses can take advantage of. Failing to invest in your company for an extended period is ill-advised, as it will create new opportunities for competitors.”

Karl Burrell, managing director at Lamont Pridmore’s Kendal office, added: “Investing in a business doesn’t have to be risky if carefully planned and funded with the use of grants and tax reliefs such as the Annual Investment Allowance and R&D tax credits.

“Time doesn’t stand still and if you fail to invest during these uncertain times you may find that your competitors can gain an advantage.”

Stuart Edger, managing director at Lamont Pridmore’s West Cumbria offices, added: “It is understandable that businesses do not want to risk their reserves and surpluses on investment during such uncertain times, but not investing in a business can be just as dangerous.

“The Government offers several tax reliefs, such as the Annual Investment Allowance and R&D tax credits, which can help businesses to remain competitive during these difficult times.”