Last week Chancellor George Osborne delivered the combined comprehensive spending review and Autumn Statement. SMEs were anxious about what the outcome of the statement would mean for them, and we discussed before the statement how we thought it would affect them.
Overall, it seems that George Osborne’s latest Spending Review was a positive one for SMEs. The statement included extended business rate relief, new and expanded Enterprise Zones, and an apprenticeship levy that will address skills deficits while avoiding 98% of businesses.
We break down the main points that will affect SME’s.
Business Rate Relief
There was a sigh of relief from small businesses last Wednesday, as the Government pledged to keep them exempt from business rates.
Chancellor George Osborne pledged to keep the Small Business Rate Relief scheme going for another year – which he said would help 600,000 businesses. Using this scheme, SMEs will receive 100 per cent relief for properties with a rateable value of £6,000 or less, which means that small business owners won’t pay business rates on properties with a rateable value of £6,000 or less.
What we already knew is that the Chancellor would reduce corporation tax to 18 per cent.
Businesses with a payroll of above £3 million will be taxed at 0.5% – meaning that only 2% of businesses will pay the levy, while all will benefit from the increased availability of apprentices.
However, one department that is being cut is the business, innovation and skills (BIS) department, with day to day spending being cut by 17 per cent.
In the full copy of Osborne’s Autumn Statement was more information on new plans to force banks to share the data they hold on small businesses. Details of this are scarce, however it spears that banks will be required to open up access to the accounts data of businesses to three credit information giants – Experian, Equifax and CreditSafe. This is good news, as more open data can really improve small businesses’ access to finance.
Something that could also potentially impact SMEs positively is that £11 million will be invested into London’s travel infrastructure. This could impact the way the capital’s SMEs transport goods and services to the rest of the UK. Public spending will also rise to £821 billion by 2019-2020.
The chancellor has promised for a diesel supplement on all company cars – positively impacting those who drive a diesel company car and affecting thousands of SMEs that supply cars to staff.
What was missing from the statement?
One of the most anticipated issues for SMEs was missing from the Autumn Statement – late payments.
The UK’s small businesses have been plagued by payment issues over the past 12 months, forcing SMEs to fork out over £26 billion in order to retrieve their hard-earned cash. The Tories are yet to announce a small business commissioner, someone who could put an end to late payments.
Before the statement there were rumours that Osborne would announce a one year extension to the Bank of England’s controversial Funding for Lending initiative, but nothing was said on the matter.
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