The business wish list
Chancellor George Osborne began this month by flying in the face of austerity and splashing out on a new pet dog.
“Welcome to the new resident of Downing St. The kids have called her Lola”, he tweeted before warning about the “toilet issues” associated with the particular breed.
Welcome to the new resident of Downing St. The kids have called her Lola pic.twitter.com/FXyM96acg1
— George Osborne (@George_Osborne) December 1, 2013
But what will the Chancellor have in his Autumn Statement that will help businesses defy austerity?
So far, we know that he is expected to announce a cap on business rates and pledge an extra £250m for the British Business Bank.
Going by September’s retail price index, a 3.2% increase in business rates is likely next year. This would cost businesses an extra £900m.
But a cap on business rates is not all London businesses want. Take a look at the entrepreneurs’ wish list for the Autumn Statement 2013.
1. “Tax cuts are crucial” – Paul Aitken, CEO and founder, borro:
“The Autumn Statement is the next stepping stone in making changes to create a difference for the nation’s struggling small businesses. Tax cuts are therefore crucial, and what I’d expect to see from the Treasury to make that difference. This would help business owners become more bullish and give them the confidence to seize more opportunities – ultimately breathing life back into the economy.
“Sadly, one in five small businesses have been unable to pursue new business opportunities because of lack of funding. Boosting small businesses across the country is crucial; they have suffered tightened credit conditions for too long. Hopefully change is afoot.”
2. “Address youth unemployment” – Charlie Mullins, founder and MD, Pimlico Plumbers:
“The Autumn Statement needs to address the high level of youth unemployment in Britain before it causes irreversible damage to businesses and society alike. Action has to be taken now to tackle the problem through incentives to business, such as a cut in National Insurance contributions for recruiting young people, or more significantly, a national, government-backed apprenticeship programme, which uses money from the benefits pot to part-fund the wages and training of young people.
“The Chancellor should us the Statement to redefine the status of apprenticeships in the UK, positioning them as a serious and genuine career path for our young people.”
3. “Cut national security contributions” – James Uffindell, founder, Bright Network
“The UK economy is now seeing exciting growth, however the ‘jobs engine’ is still very reliant on SMEs so anything to encourage entrepreneurs and risk takers to create new jobs is welcome.
“Cutting National Security contributions would be an incredibly welcome to reduce the cost of hiring people and give employees more spending money in their wage packets to power the recovery. Also, any an extension of the wildly successful EIS & SEIS schemes would be superb, as any entrepreneur knows when something goes well, do more of it. These tax incentive schemes connecting start-ups with the capital they need – should be made even more appealing through extending the ceilings of the amounts that can be invested.”
4. “Increase competition in the banking sector” – Philip Letts, CEO, Blur Group:
“In order for British businesses to compete better in the international marketplace the Chancellor should in his upcoming Budget look beyond simply slashing corporation tax. Although businesses welcome this move, alone it is not enough. It needs to be complemented by increased competition in the banking sector in order that borrowing costs can be reduced; this will allow businesses to expand domestically and internationally.
“Also, allowing businesses greater access to advice and capital overseas would be beneficial. To achieve this, the government could set up infrastructure to facilitate greater collaboration between companies entering new territories.”
5. “Reward British entrepreneurs by reducing capital gains tax” – Rupert Lee-Browne, founder, Caxton FX:
“In the Autumn Statement, I would like to see the Chancellor take measures to help reverse the culture of British entrepreneurs exiting their businesses. There is already lots of support and many incentives in this country for people when starting up businesses and also for when they sell out, in the form of entrepreneurs’ tax relief. But what about when they stay in? The Government should reward entrepreneurs for building their companies by reducing Capital Gains Tax on dividends for businesses of 10 years old or more.
“Britain’s SMEs are the engine room of the economy and we should be encouraging entrepreneurs to continue growing their businesses, creating much needed jobs and helping to sell British industry both at home and abroad.”
6. “Business rates are crucifying business” – Joanne Mathews, co-founder, TenPilates:
“George Osborne talks about supporting SMEs but so far has done nothing practical to help.
“Business Rates are my particular bugbear. Not only are they crucifying small businesses, but they’re discriminating in favour of online companies, who, by definition need less real estate to operate. No wonder our high streets have become homogenised – large chains and multinationals are the only businesses that can afford the rent/rates package.
“I’d like to see him reduce business rates for companies who do the bulk of their business locally. TenPilates may be small, yet it still employs 70 people and has over 130,000 customer visitors a year to its studios, all supporting the local economy by working, shopping and/or socialising in the area.”
7. “Make SME lending more accessible” – Vashi Dominguez, founder, Vashi.com
“I would like to see a commitment from the government to make lending to SME’s more accessible and straightforward in 2014. Last year George Osborne pledged to channel £1.1bn in loan capital to small businesses, but so far only around £5m has been distributed.
“SMEs are at the heart of the economic recovery and it is vital that they are able to access funds to build solid financial foundations which they can expand upon. I started my jewellery business with just £80,000 and I am living proof of the incredible things that can be achieved with just a modest capital injection.”
8. “Introduce tax incentives for public sector tenders” – Sam Parton, co-founder, Openplay.co.uk:
“I’d like to see tax incentives for public sector tenders to encourage more collaboration with SMEs rather than conventional larger companies. Currently SMEs often have little chance when applying for public sector contracts, even if they tend to be a far more cost effective solution than larger, established companies. Tax incentives to the tendering organisations who work with SMEs would be to the benefit of all, helping SMEs get themselves established who can then create jobs in the process.”
9. “Introduce EIS-type concept for PAYE” – Simon Hill, MD, Wazoku:
“I’d like to see an Enterprise Investment Scheme (EIS) type concept applied to PAYE for small businesses as a way of helping emerging firms. Instead of PAYE liability going to HMRC, business owners could offset that liability and use it to pay for a new hire. If this could be done to a max cap of PAYE over a year it would be an innovative approach to getting people back to work, helping small businesses to prosper and bolstering the economy.”
10. “Reduce cost of living” – Daniel Todaro, MD, Gekko:
“With mortgage and business lending officially down in October, I would like to see the Chancellor work on reducing the cost of living. There needs to be less talk about the incumbent’s mess as he has now been in power for over three years and the increase in the cost of living can now certainly be attributed to him.
“From an employer’s perspective, I suspect that my staff are expecting higher salaries in line with the rate of inflation. As an SME we have had the Work Place Pension statutorily implemented this month; effectively another form of tax that could cost my business in the region of £250,000 (not including administration) in the coming year. This enforced expenditure, which must be factored into my overheads, has the potential to make any pay reviews for staff negligible and most certainly not meet inflation.”