Commenting on announcements made today by the Chancellor targeting SME businesses, David Bywater, Tax Partner said: “The Chancellor delivered a Budget today which put the SME community firmly at the centre of future UK economic growth with a stream of measures to help them invest, innovate, grow and export."
“The Chancellor has listened to the SME community by doubling the Annual Investment Allowance, and from next month businesses will get 100% tax relief in year one on investment in plant and machinery up to £500,000. This relief isn’t due to expire now until the end of 2015 giving a longer term incentive for SMEs to invest and expand their businesses. For those SMEs who do more than make, but also innovate, the increase in refundable R&D tax credits will give these businesses more cash to invest during their early years before they achieve profitability, which can deliver vital funding for the high tech sector in particular.
“Recognising that skills and talent are at the heart of any business, the Chancellor took further steps to help SMEs invest in filling their skills gap with a funding packing for an extra 100,000 apprenticeships over the next two years. Good news for businesses and young people looking to get a foothold in to work, and develop the skills that they need for a long term career.
“Businesses will also be helped by a package of measures aimed at reducing the cost of energy and fuel, particularly for those labour intensive businesses, which in turn will help SMEs and UK business to be more competitive against their European and US counterparts. Also focussing on the global stage, the Chancellor is seeking to help SMEs as they fly the flag for Britain with the announcements of increased practical support from UKTI and the doubling of Export Finance. These measures should help to make this sometimes challenging journey into overseas markets much easier.
“Finally, the Chancellor with a commitment of over £100 million investment in science and technology signalled his belief in the value of harnessing the collective power of small clusters of like minded companies up and down the country, much like we are seeing in Tech City, which will encourage small business start ups and the creation of employment. Helping to support start-ups to that next stage of vital high growth, the Chancellor also made permanent the tax reliefs available to seed investors in these small businesses.
“The only sting in the tail for our SME community was the lack of any firm announcements of new and/or accelerated infrastructure projects. Growing a business is important, but it is a modern infrastructure which SMEs and businesses more generally need to thrive on a global stage and the delay in getting many regional programmes up and running will hinder some of our regional business communities on their journey to growth.”
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Chancellor’s Budget 2014
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