What did the Autumn Statement mean for SMEs?


Depending on their political slant, news headlines in the wake of George Osborne’s Autumn Statement on December 3 either championed his efforts for a fair society and the UK being the fastest growing G7 economy, or lampooned his failure to meet borrowing targets, but let’s cut to the core and look at some of the key points that affect our businesses:

Increase in funding

Osborne confirmed that small businesses are to be assisted with £500m in bank lending, in addition to £400m in governmental capital funds.

The former is covered by the Enterprise Finance Guarantee Scheme, which sees the Government stump up three quarters of the loan handed out to an SME. In theory, this should make banks more willing to lend, since they only have to fund 25% of the amount themselves.

In addition, the Funding For Lending scheme, which has had mixed success since its launch in 2012, is to be extended by another year. Osborne argued that an improvement in the economy of large businesses and households means it is now time to “focus the scheme’s firepower on small businesses”.

Review of business rates

One of the most revolutionary announcements was that the 26-year-old business rates system used in England is to undergo a “structural review”.

With English businesses paying higher rates than any others in the EU, organisations like the British Retail Consortium have argued that this is in part responsible for the ailing high street and businesses being forced online.

The intricacies of the review are not yet known, but the BBC has suggested that there will be no change to the total amount taken from businesses.

R&D ramped up

Companies involved in science and technology will be pleased to hear of increased tax credit on research and development projects. More SMEs are eligible for this than they might realise, with the design and development stages of projects often being the costliest, and therefore the most worth claiming back on.

Other notable pledges include the fact that companies will no longer need to pay National Insurance for young apprentices, and that SMEs are to receive tax relief on flooding prevention, which will be of interest to those affected by the deluges that hit areas like Essex during the summer.

It all reads well, but business owners and directors will be well aware that the next challenge will be to put these words into practice. As always, the best way to get the most out of your business over the next 12 months will be to work closely with financial expects and devote as much of your own time as possible to the business, thus making hiring an outsourced accounting service a great way to make a statement of your own.