Rural businesses need increased Government support to tackle "unique challenges", according to a new report from the Federation of Small Businesses (FSB).

The FSB's latest report shows how small firms in rural areas are struggling with rising business costs, poor transport links and unreliable internet connections.

Over a third (37%) of rural SMEs reported more than a 10% rise in operating costs in 2022. Only 43% of rural businesses planned to grow in 2022 compared to around half (49%) of urban firms.

Unreliable broadband was also cited as a top concern for rural SMEs. While only 17% of urban businesses reported issues with internet reliability, this rose to 32% in rural areas.

The FSB proposed a number of recommendations to address this "rural deficit". Firstly, the VAT turnover threshold should rise from £85,000 to £100,000 to help "encourage growth" and prevent small firms from scaling back activity.

The Government should also introduce measures to improve internet connectivity to ensure small rural businesses can meet their digital needs.

Speaking on the report's findings, FSB national chair Martin McTague said:

"The Government has the power to create a more sustainable and resilient economy that benefits everyone, no matter how small or how large their rural community is."

Talk to us about your business costs.