One of the most prominent changes for SMEs last year came in the form of Osborne’s Autumn Statement announcement that the government would be launching a structural review of the current business rates system after the election and capping annual rate increases at 2 per cent. However, , at the time Matthew Lee, Managing Partner at accountants Bishop Fleming believed the action may have come too late to prevent small businesses from paying disproportionate rates, stating:
“Mr Osborne did announce the root and branch review we want, but not for some years. Meanwhile, UK businesses pay vastly more in Business Rates than any EU competitor.”
Alongside business rates, red tape and late payments remain two important issues for small businesses in the lead up to the Budget. Small business accountancy service Tax Assist recommends making the Office of Tax Simplification a permanent fixture to allow further progress to be made on simplifying complex legislation for SMEs. Enterprise Rocks founder Tony Robinson would also like to see mandatory payment within 30 days for government suppliers, as promised by Business Minister Matthew Hancock in late February:
Similarly, addressing regional disparity remains a key challenge, and with Manchester businesses welcoming devolution plans for the city, Grant Thornton are backing further plans to create a Northern Powerhouse.
Looking beyond fledgling companies, business group the Confederation of British Industry (CBI) has highlighted the importance of providing better growth opportunities for mid-sized firms. The government’s recently announced Help to Grow scheme may go some way towards boosting lending to these ambitious firms, but CBI Director General John Cridland believes more could be done, stating:
“The UK is still missing a trick on long-term growth capital. The next government needs to mind this financial gap otherwise our medium-sized firms - the job creating dynamos of the economy - will suffer.”
Equally, Cridland urges the Chancellor to use his Budget speech to maintain the current allowance for tax-free research and development at £500,000, as the allowance is due to drop to just £25,000 in the next financial year:
“The Chancellor must reward growing, ambitious firms with the tools to get on with the job of rebalancing the economy and lift productivity. Since investment plans are sometimes several years in the making, having a clear path for the level of the AIA going forward is critical.”
Finally, Grant Thornton suggests the introduction of an initial tax relief scheme to relieve businesses from the up-front costs of researching and entering new markets, in order to encourage MSBs to extend their international reach.
Follow Aldermore on Twitter this Wednesday, where the Bank will be sharing live updates from the Budget speech as George Osborne explains how the Conservatives plan to support British businesses in 2015.
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