Government help for small businesses
Existing government help for small businesses
The Government’s ambition is to make the UK the best place in the world to start and grow a business. After all, it is business that creates the wealth and jobs which will help power balanced, sustainable economic growth. Already, the government has taken the following action:
Small Business Tax Simplification Review: the Chancellor has tasked the Office of Tax Simplification with undertaking a thorough review of small business taxation with the intent to create a stable and supportive tax system for small firms. This includes IR35.
Lower business taxes: the main rate of corporation tax will fall from 28 to 24 per cent over four years, and the small profits rate to 20 per cent in April 2011, meaning that the UK will continue to have the lowest rate of corporation tax in the G7 and the fifth-lowest in the G20.
Reduced National Insurance Contributions: the threshold at which employers begin paying National Insurance Contributions will rise from £110 to £136 in 2011/12.
Employer National Insurance holiday for new businesses: A new three-year scheme means that new businesses starting up in selected areas will not have to pay the first £5,000 of class one NICs due in the first 12 months of employment for each of the first ten employees hired during the first year of trading.
Extra Small Business Rate Relief: the amount of relief available for small firms has been doubled for one year, and we are working to free local authorities to administer Small Business Rate Relief in a way that best serves local businesses and local needs.
Fair access to finance: the Enterprise Finance Guarantee has been extended with up to £2 billion over four years; the enterprise capital fund programme has been extended to commit a further £200m and new funds will come on stream in the coming months and years. In addition, we are looking at ways to support ‘business angel’ investment; and with our encouragement the banks are working on a new lending code.
Less red tape: a new ‘one-in, one-out’ system for new regulations has been established, a major review of health and safety legislation has been completed and we have ended the ‘gold-plating’ of EU regulations.
Encouraging enterprise: the entrepreneurs’ relief lifetime limit for Capital Gains Tax has risen from £2 million to £5 million and we have made clear that enterprise is for everyone – including those in social housing.
Access to government contracts: Government has signalled an aspiration for 25% of new contracts to be awarded to SMEs. This will be achieved by addressing head on some of the biggest barriers faced by smaller businesses in competing for public sector contracts and making it easier to find opportunities to do business with the public sector. A new standardised set of pre-qualification questions has been implemented in government and is mandatory for use across central government. In March 2011 a new facility – Contracts Finder – will enable SMEs to more easily access public procurement opportunities online and free of charge.