In the 2012 Autumn Statement, the chancellor announced some positive measures to help small businesses, although many entrepreneurs believe he could have done more. The statement has therefore received a mixed reaction from small business owners.
Some of the main announcements include:
- The extension of the Small Business Rate Relief scheme for a further year from 1 April 2013, enabling 350,000 small firms to pay no business rates during this time
- Confirmation of £1bn in funding for the new Business Bank to boost lending to small companies
- An increase in the annual budget of UK Trade & Investment by £70m, to deliver services to more small and medium size exporters
- An increase in the Annual Investment Allowance (AIA) from £25,000 to £250,000 for the next two years from January 2013
- The government to devolve a greater proportion of growth-related spending to Local Enterprise Partnerships and create a single funding pot for local areas from April 2015.
- A consultation on allowing investment in SME equity markets such as the Alternative Investment Market (AIM) to be held directly in stocks and shares ISAs, to encourage investment in growing businesses
- Confirmation that the 'shares for rights' scheme will go ahead
- The cancellation of the planned 3% fuel duty increase in January
- Corporation tax to be cut by a further 1% to 21% from April 2014
- UK Export Finance to establish a scheme, which will run until the end of 2015-16, to provide up to £1.5bn of loans to finance smaller export transactions.
- Funding for ultrafast broadband in twelve smaller cities – Brighton and Hove, Cambridge, Coventry, Derby, Oxford, Portsmouth, Salford, York, Newport, Aberdeen, Perth and Derry-Londonderry.
Here, small business owners react to the measures announced in this year's Autumn Statement:
Florian Richter, director of SumUp UK, remarked that little of the relief being offered by the government in the aftermath of the double-dip recession will benefit small, independent, businesses.
"While the plan to freeze fuel prices will be welcomed by those business people who make their livelihoods from—and on—the roads, it is really a stay-of-execution—not a pardon—for most small merchants. Similarly, Vince Cable’s 'business bank' (which received tellingly little 'air-time' today) sounds promising, but until more is revealed, it’s difficult to know whether it will be a genuine game-changer for small businesses."
Gary Wilkinson, CEO at Cambridge & Counties Bank said that it is imperative that the government looks to strengthen the UK’s position as the home for small and mid-sized growth businesses by focusing on the promotion of new bank lending.
"While the 'funding for lending' scheme, the new British Business Bank and today’s announcement of a cut in corporation tax show that the government is being proactive in the SME space, there needs to be better co-ordination of such initiatives. At first sight it is difficult to see how these measures will significantly increase the availability or suitability of credit for SMEs, particularly in the near term. Further details are required about exactly how the new Business Bank will 'partner' with existing banks and other lenders."
Charlie Mullins, founder of Pimlico Plumbers, said: "Like a business turned down for bank lending, George can only work with what he’s got. What he delivered was a statement that will encourage business and therefore help individuals.
"Cutting corporation tax and introducing a ten-fold rise to plant and equipment tax relief shows demonstrates that Britain is a good place to do business. These measures will encourage businesses to expand and create jobs, which helps the wider economy and improve the lives of men and women across the country."
Dr Peter Gradwell, founder of Gradwell, remarked: "The government could definitely have done more sooner to encourage small business investment in particular, but unfortunately we have waited until a triple-dip is looming before taking appropriate action.
"The Autumn Statement was positive but there remains a question over why we need to wait for some of these initiatives to be implemented. The sooner they come into play, the sooner businesses will benefit, as will the economy as a whole."
On the announcement that the government is to consult on allowing investment in SME equity markets like the Alternative Investment Market (AIM) to be held directly in stocks and shares ISAs, Anil Stocker, co-founder of MarketInvoice, said:
"The AIM has been a great success to date, offering a novel means for growth businesses to take on investment. Such companies are an incredibly important part of the UK economy, and the government is right to promote investment on the AIM as a means of ensuring their growth is appropriately supported.
"That said, the AIM is only appropriate for a small proportion of firms. The price of listing on the AIM through an IPO is around £500,000 per year. For the vast majority of UK businesses, this isn’t a viable option. "
Ed Molyneux, CEO and co-founder of FreeAgent , said the most positive measure in the statement is the announcement of optional cash-basis reporting for the very smallest businesses.
"The costs of compliance - usually for tax filing - for most micro businesses are hugely disproportionate to their profits, so having the option of cash-basis reporting is great news. It will make the whole process easier and less expensive for millions of small businesses across the UK which, in turn, will help them to flourish and grow."
Nick Moore, MD of We Trade It, said the Autumn Statement provided no immediate encouraging news for small business and startups.
"Ultimately I feel that the statement lacked innovation, forward thinking and leadership. Osborne failed to deliver a clear plan of action that details how he will deliver the support that Britain’s SMEs so desperately need."
5th Dec 2012