Small business experts have warned that last week’s Budget was ‘only the first step in a long journey’, though industry groups did welcome as ‘better than expected’ the range of measures aimed at boosting enterprise.
Headlines included a reduction in corporation tax, a £180 million rise in funding to create 50,000 apprenticeships – of which 10,000 will be made available to smaller businesses – and the announcement of 21 enterprise zones to be created nationwide.
Firms setting up in enterprise zones will benefit from tax breaks, simplified planning rules and Government help accessing superfast broadband.
A three-year freeze on new regulations for small businesses – a move trailed before the Budget – and measures to scrap large amounts of punitive legislation were warmly welcomed by experts.
Firms will also benefit from a further year’s small business rate relief, an increase in research and development tax credits for small companies and the doubling to £10 million of Entrepreneurs’ Relief, which allows owners to sell their business tax-free.
In a surprise move, the Chancellor also relaxed the rules on venture capital trusts to make it easier for trusts to invest more in early stage companies. The tax relief available on Enterprise Investment Schemes will also rise from 20 per cent to 30 per cent.
Phil Orford, chief executive of the Forum of Private Business, says he welcomes the many short-term measures to encourage enterprise, but believes the Government could do more. ‘It was important that a Budget heralded as being pro-enterprise focused on easing the dual burdens of tax and red tape, two of the biggest barriers to business growth and job creation facing small businesses, and we were not disappointed,’ he says.
‘However, the Government could have gone further in making the tax and regulatory systems more proportional to all small businesses.’ Matthew Harris set up Fitness4Less, a low-cost gym chain with branches in areas including Newport and Bristol. He has 100 staff and is looking to hire 15 more in two weeks when he opens in Southwark, south-east London.
Harris, 43, says: ‘Cutting corporation tax is good news, while the moratorium on new regulation is very welcome and should make it easier for firms such as my own to grow and take on more staff.’ However, it is the announcement that 21 enterprise zones will be created in disadvantaged areas that Harris most welcomes.
‘We are a low-cost business and to keep costs down we deliberately look to set up in secondary locations where it is cheaper to do so,’ he says. ‘We would look to open more gyms in enterprise zones where we could benefit from tax breaks and help.’ David Frost, director general of the British Chambers of Commerce, says: ‘Despite tight fiscal conditions the Chancellor has prioritised business growth and private-sector expansion alongside deficit reduction. There are some real pro-enterprise moves in the Budget that firms will commend.’
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By Kerry Davies