Small and medium-sized enterprises (SMEs) featured heavily in Chancellor George Osborne’s Autumn Statement on December 5, namely the much welcomed announcement of a business rates cap and tailored tax reliefs to small firms.
Subsequent to the statement, the £1 billion government funded Start-Up Loans scheme has received a further £250 million in funding in a bid to help SMEs benefit from the economic recovery.
The Start-Up Loans scheme fuelled by the British Business Bank is currently being set up by the Department for Business, Innovation and Skills, (BIS) and says it expects to generate more than £500 million in new lending and investment for the UK’s smaller businesses each year.
Deputy Prime Minister, Nick Clegg, said: “Small businesses are working hard to fuel our recovery and help us build a stronger economy.
“I am determined that we do all we can to help companies that have struggled to get the investment they need – investment that means they can employ those extra people, take on that new order, and buy that new equipment.”
Mr Clegg believes the British Business Bank will be able to take control of the capita and use the guarantees from the government to aid businesses by lending a lot more money.
It is clear from the new initiatives proposed in the Autumn Statement that the government have taken a proactive approach to the financial plight of the SMEs, as such business-friendly proposals include:
- A business rates cap of two per cent from April 2014, as opposed to it being linked to RPI inflation
- £1,000 levy on business rates for smaller retailers with a rateable value of up to £50,000
- A rate relief extension for smaller firms until April 2015
- A 50 per cent reoccupation relief for businesses who relocate into empty retail properties
- From April 2014 a new tax relief will be introduced for companies who invest in new social impact bonds and social enterprises
- Employers’ National Insurance Contributions (NICs) will be scrapped for under-21s
- A pledge to double export finance support to £50 billion, while extra backing will go towards helping 50,000 new business start-ups across the UK.
Whilst these short-term measures will no doubt be hugely welcomed, the real test will be to see how long the schemes last, which is crucial for businesses in order to forecast their stability.