SMALL BUSINESSES were the beneficiaries of some positive measures announced in an Autumn Statement that was light on pre-election giveaways.
In his address to the Commons, the chancellor pledged cap business rates, to subsidise the employment of young people, freeze fuel duty, increase funding for export and provide a series of industry-specific tax reliefs.
While the measures were broadly welcomed as positive, there remained scepticism that the proposals are bold enough to really support growth and investment among Britain’s struggling businesses.
As widely expected, George Osborne promised to cap the rise in business rates at 2%, while also extending the small business rate relief to 2014 and offering small retailers a £1,000 discount on business rates for the next two years.
He also announced plans for the introduction of a “reoccupation relief” that will halve the rates for businesses moving into vacant premises and that businesses will also be allowed to pay their rates in 12 monthly instalments.
The moves were welcomed by retail lobby group the British Retail Consortium, which claimed the rates cap on its own would release £90m into the economy.
“The chancellor has recognised that businesses are suffering and is right to listen to retailers’ concerns on business rates,” said Helen Dickinson, director general at the BRC.
However, others were disappointed Osborne stopped short of instigating a full review of the “broken” business rates system.
“The measures announced to curb business rate increases are positive, but not strong enough to boost companies’ cash flow and investment. The chancellor should have been bolder, freezing business rates entirely until this pernicious tax can be properly reformed,” said John Longworth, director general of the British Chambers of Commerce.
Among other measures, the chancellor announced that, from April 2015, employer NICs will be abolished for under-21s earning less than £813 a week, that stamp duty for shares purchased in exchange traded funds would be abolished and that HMRC would fund employers directly for taking on apprentices.
There were also efforts to encourage British exporters by doubling the export finance available through the export finance facility to £50bn. However, one commentator warned that facility had not been well explained to businesses.
“Increase in the export finance facility is all well and good but SMEs do not know how to access this or take advantage,” tweeted Bobby Lane, partner at Shelley Stock Hutter, during the statement.
Indeed, funding remains a concern for British business with Ed Balls, the shadow chancellor claiming that net lending to businesses had fallen £100bn compared to May 2010.
Tax breaks are a very enticing incentive for developing and managing a green management strategy, writes Graham Jarvis
The biggest threat of turmoil relates to uncertainties over the US November elections. The markets will have to seriously consider the possibility of Donald Trump being elected
Chancellor Philip Hammond has indicated that he will scrap predecessor George Osborne’s pledge to cut corporation tax to below 15%
Large businesses are increasingly ‘low risk’ when it comes to tax planning, says Pinsent Masons, the international law firm