Autumn Statement: The Key Issues Affecting Small Business
Promises of re-structured business rates, further tax relief and support to exporters announced during 2014 Autumn Statement
On Wednesday, December 3, the chancellor of the exchequer George Osborne disclosed 2014’s Autumn Statement – outlining the government’s latest plans for the UK economy.
A number of entrepreneurs cited hopes for extension on current research and development tax credits, cuts on corporation tax, and more government support prior to the release of the statement and many of these requests were answered.
Here, is4profit has pulled together the key elements from the statement that will impact the small business community.
British Business Bank
Osborne announced that the government will be expanding its British Business Bank; this will mean that the Business Bank’s Enterprise Capital Funds programme will offer a further £400m to support venture capital, giving fast growing small businesses greater access to finance.
Funding for Lending
The Funding for Lending scheme will be extended by a further year until 29 January 2016, with emphasise on lending to small businesses. From next year, participating firms will be able to draw £5 of funding for every £1 of net lending to small businesses.
Furthermore the government has assured finance for small businesses through Enterprise Finance Guarantee (EFG), which has so far delivered £2.9bn of lending to small businesses. The government will boost funding through the EFG by £500m in 2015-16.
Business rate changes
As hoped for by all the small business community, the chancellor has promised that the business rate structure will be reviewed and rate relief will be doubled for another year to April 2016. In addition to this, high-street business rates discount will be increased by 50% – up from £1,000 to £1,500 next year.
Small and mid-sized firms will receive additional research and development tax credits, which was another main expectation of entrepreneurs prior to the statement.
Also small and mid-sized firms that are located in areas that are effected by flooding will welcome the news that tax relief will be expanded on business investment in flood defences.
Support for exporting
The 2014 Autumn Statement included a necessary development in business exporting, Osborne singled out first-time exporters stating that of the overall £45m package to exporting, £20m will go towards supporting new exporters.
Furthermore the UKTI’s regional network of international trade advisers will be increased; an internet-based support will expand to encompass a further 5,000 firms and funding will be provided to assist businesses seeking working capital for expanding overseas and researching supply chains.
Local Growth Fund
The Local Enterprise Partnerships will get an extra £1bn, bringing it up to £13bn. The first round of Growth Deals, amounting to £6bn, were announced earlier this year for 2015-16 and 2020-21.
Additionally, the Autumn Statement report outlined plans to extend the enterprise zone in Nottingham to Derby and possibly look at making Croydon a Growth Zone.
Businesses will no longer be required to make National Insurance contributions for apprentices who are under-25, making it easier for small businesses to take on young employees. The measure is said to benefit 500,000 apprentices.
Announced by Osborne six months ago, the chancellor plans to invest £7bn intro transport, infrastructure and connectivity to “bring together the great cities of the north”.
Finally, Osborne provided welcome news for small businesses with high transport costs by promising to freeze fuel duty, which will directly impact fuel prices, and decrease fuel price surcharges.
For further insight into how the Autumn Statement will affect you as a business owner have a look at our sister site Startups.co.uk’s coverage here.