The UK needs a Budget that will deliver growth from SMEs. So we’ve asked London’s entrepreneurs to tell us how they would do it, if this was their Budget
Doug Richard, founder, School for Startups:
Make sure everyone knows about the SEIS programme for investment in young companies
The one thing I want is already there: the SEIS programme. I just wish everyone knew about it. SEIS is a tax incentive for ordinary people to invest in young companies. It provides up to 78 per cent discount though capital gains tax relief and tax credits, and provides a tax free gain if the business succeeds, and relief if the business fails. It’s the biggest giveaway in HMRC history.
Create a student-loan style tax rate for start ups
Shaa Wasmund, founder, Smarta.com:
Cut the top rate of tax and introduce new tax initiatives for people setting up new businesses. Introduce a student loan style tax rate whereby no tax is to be paid in a start-up up to a certain amount in the first two years, and is then repaid after the business exceeds £X turnover. Plus, lower NI payments for all businesses under 20 employees.
Bring the regional payroll tax breaks to London
Joshua March, co-founder and CEO, Conversocial:
Payroll tax is a huge monthly expense for companies – a tax break for this would make a massive difference to how many start-ups survive, and how many people they hire. The government has given tax breaks, but only in the regions. If they are really serious about helping enterprise then they need to extend these to the start-up hub of the UK: London.
Boost software and education by lifting the immigration cap on students of these disciplines
Mark Needham, chairman, Widget UK, a consumer electronics distributor:
The software and education sectors create jobs and pay taxes, but also help us achieve better lives. But they are suffering from the cap on immigration imposed by this government. The government needs to stop including students in the immigration cap. Computer scientists are so valuable – just think how much we would like a company like Facebook to spring up in this country – that software engineers with a masters or other postgraduate degree in computer science should no longer be counted in the numbers being capped until they have been here five years. Simply by a Sir-Humphrey like change, the government can help businesses which create socially useful outcomes as well as economic activity.
Encourage banks to lend over longer periods to stimulate business investment
Lee McQueen, founder and director, Raw Talent Academy, and winner of The Apprentice:
If this was my budget I would be doing more to encourage longer-term lending from the banks to SMEs. At the minute banks are only really lending in the short term with three year loans. The trouble with that approach is that with the economic downturn, people are more cautious and less likely to invest in businesses in the short term. If the government encouraged banks to lend over a longer a period – say seven to ten years – it would give small businesses a better chance of attracting investment, growing their companies and making a success of themselves.
Subsidise globe artichokes and incentivise kids to start businesses
Shed Simove, founder, 85by55, and Ideas Man:
If this was my Budget, first I’d subsidise globe artichokes (totally delicious and engaging to eat) and back massages (if everyone had a good massage now and again, the world would be a happier place), plus I’d implement a new rule that students aged 10 and up could choose one subject they hated at school – and for every £50 they made from launching their own business, they’d get one question removed from the final exam in their loathed subject. I’d call this my ‘Cash For Questions’ initiative. If the current Government wants to sign me up as Enterprise Tsar, my details are on www.ShedSimove.com
Defer employer’s National Insurance contributions for start-ups
Dan Crow, CTO, Songkick:
Defer employer’s National Insurance contributions for the first three years of a company’s life – new companies will hire more employees during their critical early years. Encourage wealthy individuals to help create new businesses through tax efficient “Angel” funds that can only invest in new companies.
Give tax breaks to SMEs, not just start-ups
Patrick Eve, MD, TranslateMedia:
I’d like to see a budget that supports SMEs, and not just start-ups. It’s not enough to give tax relief on venture capital investments. The same breaks should be available to mid-sized SMEs, to stimulate economic growth and employment in more established, stable, and – importantly – growing businesses. I’d like to see a further reduction in corporation tax for SMEs, to counter higher NI rates, and a package of tax incentives for owner-managers of SMEs.
Extend the Enterprise Investment Scheme (EIS) further
Stephen Voller, CEO, Cella Energy, a nanotech firm:
Business Angels are often the only form of finance for start-ups and they are incentivised to invest under the Enterprise Investment Scheme EIS. The Chancellor increased the EIS allowances in the last Budget. It would be good to see the allowances increased further.
Abolish the 50p tax rate
Charlie Mullins, founder, Pimlico Plumbers:
Abolishing the 50p top rate tax will undoubtedly encourage enterprise in the UK and demonstrate that the government is 100 per cent behind entrepreneurialism. Entrepreneurship needs to be nurtured and supported in order to encourage more investment in
businesses that create jobs and wealth for the entire country, thus aiding our economic recovery.
Make corporation tax more graduated – smaller companies pay less than 20 per cent
Ian Meiers, co-founder, Cad and The Dandy, a Savile Row tailor:
Corporation tax in the UK is still relatively high and there isn’t a big enough distinction between smaller companies paying 20 per cent and larger corporates at 25 per cent. A more graduated approach to corporation tax, with smaller companies paying less than the 20 per cent, would help retain more profits that can be used to invest back into the business during the difficult early years of starting up a business.
Reduce tax on every level and encourage engineering
Hugh Chappell, non-exec director at Parkatmyhouse.com, non-exec director of Lovestruck.com:
For me it’s all about stimulating growth and creating new jobs in the private sector. I want to see taxes reduced on every level (individual, VAT and corporation). There is still too much red tape. Make it easier for new businesses to establish and everybody will benefit! Finally, we need to encourage engineering and manufacturing in the UK with more investment and tax incentives.
Simplify the R&D application process to supercharge tech companies
Sarah Wood, co-founder and COO, Unruly Media:
I’d massively simplify and extend tax relief on research & development spending to encourage high-growth, high-tech companies to remain at the bleeding edge of technological advancement. Experts estimate that up to 75 per cent of eligible companies fail to apply for R&D relief and with all the paperwork it requires, I’m not surprised!
Extend the NIC holiday for small companies
Sarat Pediredla, partner & co-founder, Hedgehog Lab:
As a digital agency, our biggest cost is human resources and the contributions we make on wages. We want to invest in more jobs, even in a recession, as this is directly related to how quickly our business can grow. However, we are at a distinct disadvantage against younger competitors who have access to this benefit and older competitors that have the revenues and little risk to support organic growth. Fiscally, I understand this can’t extend to all small businesses but if the government were to define a threshold (for example less than 100 employees or £10m in revenue), this would support the really small and micro-businesses that are trying to invest in growth and new jobs.
Kate Craig-Wood, founder of web host Memset.
“As one of the much vilified “one per cent” I welcome the cut in top-rate income tax, but not purely for selfish reasons. At 50 per cent it was at a level where my brother and I were genuinely starting to consider the merits of emigrating and taking the company with us.
“Britain cannot afford to alienate its golden geese for the sake of what is petty change in the grander scheme. 45 per cent brings it just about under the pain threshold.”
You might also like…