By Malcolm Edge, UK Head of National Markets at KPMG
Following the Chancellor's Budget this week Malcolm Edge, UK Head of National Markets at KPMG, explains what the implications are for small and medium sized enterprises (SMEs) in the UK.
SMEs in the UK would have wanted to have seen three things from the announcement, how to improve competitiveness, how to de-cluter legislation and how to stimulate growth, and the Chancellor has gone some way to making sure that he achieved all three.
Lowering the corporate tax rate, improving broadband speeds in ten key cities and increasing apprenticeships all help to make the UK a more competitive place to be based, while relaxing planning laws and the simplification of the tax regime for small businesses so that they pay tax on a cash basis, will help to simplify their life.
It is growth however that is the number one issue for SMEs and there were some helpful measures around credit easing, relaxation of employment laws, enterprise loans for young entrepreneurs and key reliefs for the film, animation and games sector.
Developing new markets both in the UK and overseas is vital and expanding the amount available under the UK Export Finance Scheme is absolutely essential to small businesses, however take up rates currently are just so low that more will need to be done to make sure they know how to access it and are given the confidence to look at export markets.
UK Trade and Investment has done a lot, but there is a lot more that needs to be done here. Britain has to export if we are going to stay competitive on the world stage, but it’s all a step in the right direction.
In order to help small businesses to grow it is vital that the 'feel in people’s pockets' is there and the new personal tax rate changes should help to lift the mood and encourage consumers to start spending again.
The Chancellor tried to give something to everyone, with lots of promises of transport investment particularly in the North West of England and an extension of the enterprise zones (an enhanced capital allowances in some), as well as lots planned for London.
Much of what was said, however, has been on the horizon for a while, and people will need see the promises in action, but for many SMEs it will feel that the horizon is that much closer.
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