The Autumn Statement was expected to unveil details surrounding the UK’s economic health, as well as accommodating details for UK businesses and individuals. We also expected the first Government’s Comprehensive Spending Review since October 2010, outlining the expenditure from April 2015 onwards.
As anticipated, George Osborne’s Autumn Statement provided positive updates for small businesses and local firms. In this article, we provide a synopsis of how the report will be affecting SMEs throughout the UK.
“No economy in the G7 has grown faster than the UK in any year since 2010” – George Osborne
SMEs in the UK now employ 15.6 million people, which since 2010 has risen from 13.7 million; a healthy 13% increase. In the Autumn Statement, the government recognised that small businesses need tailored support, as they identified the number of SMES employing someone other than the owner has grown by 100,000 in the last two years.
Start-Up Loans, introduced by the government, have notably provided £180 million of funding to 33,600 entrepreneurs throughout the UK so far. It has been confirmed that the government will meet its commitment to issue 75,000 Start-Up Loans by the conclusion of this Parliament. Additionally, from April 2016, the Employment Allowance will rise to £3,000 – benefitting 1 million employers and enabling them to take on their first employee.
RECOMMENDED READ: How to fast-track growth with grants and funding
Further savings can be made for small businesses with a company van, and will have saved on average £1,357 by the end of 2015-16 due to the cancellation of the planned September 2015 fuel duty increase. Furthermore, an estimated 405,000 SMEs will continue to gain 100% relief from business rates, with a further 200,000 firms benefitting from tapering relief. We anticipate further business rate reviews and reports at Budget 2016.
Until April 2017, the Autumn Statement further supports small businesses by extending the doubling of SBRR (Small Business Rate Relief) in England.
Funding for Lending Scheme
Bank funding costs have fallen since the introduction of FLS in 2012 (Funding of Lending Scheme) and net lending to SMEs in the scheme reached £0.5 billion in the second quarter of 2015 – the second consecutive quarter of positive net lending. The Funding for Lending Scheme will continue to support lending to SMEs in 2016 and onwards.
Renewables Obligation and Feed in Tariffs Schemes
The government’s proposed changes to the renewables obligation and feed in tariffs schemes, if implemented, will save small businesses on average £500 on their energy bills from 2020-2021.
The government will be supporting SME house builders, by amending planning policy to small sites, halving the length of time for planning guarantees on minor developments and increasing the £1 billion ‘Builders’ Finance Fund’ in 2020-2021.
Tax-Advantaged Venture Capital Schemes
These government backed schemes will continue to provide extensive support to SMEs and growing businesses alike. It has been confirmed in the Autumn Statement that the government will continue to investigate options to introduce increased flexibility for replacement capital within the schemes.
Supporting Small Businesses
To support SMEs in accessing finance to benefit business development, the Autumn Statement has revealed the government plans to designate Experian, Equifax and CreditSafe under the Small and Medium Sized Business (Credit Information) Regulations 2015.
“This is a significant milestone in a major structural reform that will promote competition in the SME credit market,” – George Osborne.
The Autumn Statement highlights that there will be investments of £1.3 billion to transform HMRC into one of the most digitally advanced tax administrations in the world. The aim is for all small businesses and individuals to have access to digital tax accounts by 2016-2017.
Following an announcement in the government report, small and medium sized businesses will continue to receive support for apprentices from the government.
“The apprenticeship levy will only be paid by employers with a pay bill of more than £3 million, meaning that less than 2% of UK employers will pay it,” – George Osborne.