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Autumn Statement - Small Business Digest

November 29, 2011 at 3:43 PM

Click here for the full (98 page) Autumn Statement

Alternatively, you can read our handy digest for UK small businesses below....


Economic growth

The economic growth forecast for 2011 has been revised down to 0.9% from 1.7%. The 2012 forecast has been revised down to 0.7% from 2.5%. Growth will not return to the historic trend of around 3% until 2015.

Although these figures represent a significant revision downwards, the UK is not forecast to head back into recession as some had predicted.

 

Government borrowing

Borrowing to rise by an extra £111bn over the next 5 years, according to forecasts from the Office of Budget Responsibility. The debt-to-GDP ratio will peak at 78% in 2014 to 2015 (significantly higher than forecast) and is predicted to be falling by the end of the Parliament.

 

Seed Enterprise Investment Scheme (SEIS)

From April 2012, start-up investments that qualify for the Enterprise Investment Scheme (EIS) will receive 50% income tax relief regardless of the rate at which the individual pays income tax. In addition, these schemes will offer a capital gains tax exemption on gains realised in 2012–13 and then invested through SEIS in the same year. A significant tax break for those comfortable with the risk associated with such schemes.

 

National Loan Guarantee Scheme

Up to £20bn of guarantees for bank funding will be made available over two years. This will allow banks to offer lower cost lending to smaller businesses (under £50m turnover), subject to state aid approval. It is hoped that the scheme will have the effect of reducing the rate of interest that companies pay by 1% by taking advantage of the preferential rates that the UK government can borrow at.

In addition, the government will also make available an initial £1bn through a Business Finance Partnership, which will invest in smaller and mid-sized businesses in the UK through non-bank channels.

 

State pension

Basic state pension to rise by £5.30 next year to £107.45 per week. The state pension age will be increased from 66 to 67 in 2026. If you don't fancy working until you're 67 only to receive £107.45 per week, you might want to read these two articles:

 

Extension of small business rate relief holiday

Plans were announced to extend the current small business rate relief holiday for a further six months from 1 October 2012. The Government will also give businesses the opportunity to defer 60 per cent of the increase in their 2012-13 business rate bills as a result of the RPI uprating, to be repaid equally across the following two years.

 

Cutting HR red tape for small businesses

The Government will seek views on the introduction of compensated no-fault dismissal for micro-businesses with fewer than 10 employees. In addition, the Government will look at how it could move to a simpler, quicker and clearer dismissal process whilst also looking at ways to provide a quicker and cheaper alternative to a tribunal hearing in simple cases — a ‘Rapid Resolution’ scheme is being considered.

 

Initiatives to boost the economy

  • The government will spend an additional £5bn on 500 new national infrastructure projects.
  • £1bn "Youth Contract" to subsidise six-month work placements for 410,000 young people.
  • In you're in (or are planning to move to) the Enterprise Zones in either the Black Country, Humber, Liverpool, North Eastern, Sheffield or Tees Valley then you will be pleased to know that 100% capital allowances are available in these areas.
  • We also had confirmation of the New Build Indemnity Scheme, which is a guarantee for up to 100,000 new mortgages at up to 95% loan-to-value for new build properties in England.
  • In addition, a £400 million scheme to kick-start stalled construction projects in England (those that already have planning permission) was also announced.

 

Transport

Planned 3p fuel duty rise in January to be scrapped, although duty will go up by 3p in August 2012. The average rise in regulated rail fares to be capped at 6% (1% above inflation) in January 2012, rather than the 8% cap expected.

 

How does this affect your business? Let us know your comments on this blog & via @thewowcompany on Twitter



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