In an attempt to revive growth, Chancellor George Osborne's autumn statement unveiled a number of policies to help smaller businesses. Many of the changes that could positively impact businesses have already been announced and personally I wasn't expecting anything radically different in the main Budget.
Small businesses are the engine room of the UK economy and whilst I applaud Chancellor Osborne's intent to help them more must be done in the long-term if small businesses are to truly drive economic growth and job creation.
• Take the employee ownership issue. From April, workers may able be able to trade in some employment rights for shares in a business. I think many employees will be highly suspicious of any scheme that signs away employment protection in order to get long-term, future unspecified gains.
• The current 10% CGT rate for entrepreneurs is a good incentive, but it is restricted to those with 5% ownership. This restriction should be removed so that more can share in the incentive. This could be off-set by requiring the 'entrepreneur' to be more fully involved in the running of the business, rather than a passive investor.
• Northdoor currently makes use of the R&D reliefs which support the development of new innovations. We hope this will continue and, perhaps, even extended. We also believe that there is room for additional reliefs to encourage small businesses to invest in solutions which will make them more competitive and efficient in the long term. For many small businesses there is real risk that these investments may damage short-term viability. Additional reliefs could mitigate this risk.
• We have recently taken on apprentices and graduate trainees, and the Britain Works Apprentice scheme provides very good incentives for both the apprentice and the employer. We would like to see some of the training incentives extended to 19-21 year olds who are non-graduates. And we would also like to see travel costs for junior employees off-set against tax and then, perhaps, phased out over the first few years of employment. This would be especially beneficial in London and the south east where high travel costs can prohibit young people taking lower paid trainee positions.
Businesses are willing to play their part by investing to help kick-start the economy but the Chancellor needs to send a strong signal that this investment will be rewarded and incentivised through the tax system.