Autumn Statement 2015: Replacement of grants with loans “a false economy”, says KPMG Small Business Accounting

Autumn Statement 2015: Replacement of grants with loans

The small savings that will be made by replacing innovation grants for loans are a false economy that threatens to stall the growth of small businesses across the UK.

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Effect the uk’s start-ups and small business community

Commenting on how the Autumn Statement will affect the UK’s start-ups and small business community, Bivek Sharma, head of KPMG Small Business Accounting, comments:

“The small savings that will be made by replacing innovation grants for loans are a false economy that threatens to stall the growth of small businesses across the UK.

“Such foundation capital is particularly vital to start-up tech businesses and those that need to invest in building their intellectual property before they can turn a profit; exactly the kind of businesses we need to build a sustainable economy and compete on a global stage.

“The alternative is debt - and we shouldn't be saddling businesses with additional outgoings when cashflow is inevitably tight in the early stages of their lifecycle.”

David Bywater, KPMG Tax Partner added:

“Whilst it is evident that the Chancellor is seeking to create a supportive ecosystem for the UK’s growing SME army, there was nothing in his statement today that will leave them with anything real to celebrate.

“News of expanding enterprise zones into rural areas will be helpful and a low cost way for the Chancellor to show commitment to the SME community. However, the success of many of the existing enterprise zones is still largely untested.

“With devolution of power to local mayors and local authorities for their business communities in the future it will be down to businesses to make sure they engage better with their local councils and other stakeholders such as the Local Enterprise Partnerships in order to make sure their business environment and infrastructure works for them.

“Some sectors did better than others as the Chancellor announced (again) funding for small house builders, recognising the integral role they play in the supply chain in order to get these thousands of new homes built. Plus any SME involved in moving goods around the country will be rejoicing today with the news of a quarter of a million pounds being spent on easing Operation Stack on the M25 and of course, the pothole fund.”

 

ENDS

 

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