Regarding relief for small businesses, small business campaigner and founder of SME4Labour, Ibrahim Dogus, said:
“This is welcoming news but where is the funding coming from?
“There are more than five million small businesses in the UK and they are all struggling. We need the government to find and implement long term solutions not just soundbites.
“The government needs to end austerity and end the pay cap on public sector workers. If it is serious about tackling the challenges faced by small businesses then it needs to help encourage people to spend money locally.”
Angus Dent, CEO ArchOver:
“The Tory party’s promise to put an end to austerity has been revealed as simply words, not actions. Hammond’s plans for putting an end to a decade of under-funding do not go far enough – definitive action and continued investment is needed as a lifeline for struggling SMEs and savers.
“The Chancellor’s reduction of business rates is music to the ears of SMEs around the country. This time last year, the Chancellor announced the expansion of the National Investment Fund for business – and if that doesn’t ring any bells, you aren’t alone. A definitive step forward like reducing business rates is long overdue – particularly for small retailers struggling on the British high street. But this isn’t enough to cure a decade of difficulty for UK SMEs.
“While it could be seen as damaging for the Chancellor to offer businesses something that could derail negotiations with the EU, this doesn’t mean to say that he shouldn’t. Once Brexit negotiations are on the straight and narrow, the government needs to demonstrate that it believes in the future of British business.
“The best way to prove this would be to announce a mini-budget focused on advancing SMEs in a still-struggling economy. The Chancellor desperately needs to convince the rest of the world that the UK is still a competitive place to do business – or he risks putting the future of UK businesses in jeopardy. The Chancellor’s corporation tax reduction is the first step in the right direction for British businesses. With the strong likelihood that tariff bearings will go up, a reduction in corporation tax will reduce unnecessary friction that disproportionately affects SME owners.
“Without further concrete action from the government, SMEs are being left in the cold to fend for themselves. To battle the chill, businesses must turn to alternative finance options to give them the tools and funding they need to succeed – but nothing will reassure them more than support from their government in turbulent times.”
“The focus on technology was promising to see, including a £1.6 billion commitment of new investments to support the modern industrial strategy. However, there was no further update on the Chancellor’s proposed reforms to the EIS fund structure to encourage investment into early-stage firms deemed highly innovative – something touted in the Spring Statement.
“The Government is right to promote reforms that benefit tech startups. The country has become globally renowned for this thriving tech sector, but we must not become complacent – rather than assuming we will remain a leader in tech innovations and digital disruptions, the Government must be willing to intervene and provide a helping hand to those young companies struggling to scale-up. Approximately 50% of startups fail within their first three years, so more must be done to help nurture and support young businesses.
“With Brexit now on the horizon, the Government cannot assume that tech startups will continue to flourish. More policies, investment incentives and infrastructure improvements are needed so startups are able to progress to become mid-size enterprises and beyond.”
Ritam Gandhi – Founder and Director of Studio Graphene – a design and development studio specialising in IoT technologies and app development
“There has been plenty of talk about ‘Brand Britain’ and the role of scaling SMEs in driving productivity, and today’s budget has reaffirmed the Government’s commitment to support small businesses. It was promising to see the Chancellor follow through on the commitments he made during the Conservative Party Conference, including extending the enterprise allowance to support unemployed people to set up a business. The business rates relief for smaller retailers is also positive news. However, businesses are calling for more clarity regarding Brexit, and this budget was another missed opportunity by the Government to offer tangible support for SMEs during the withdrawal period. Many entrepreneurs are eager to embrace international markets beyond Europe, but without the right structures, many do not know how to access them.
“The Government’s somewhat muddled approach to Brexit has left many businesses in the dark, and this Budget fell short of providing the clarity entrepreneurs and SMEs were hoping for. The reality is that any initiatives the Conservatives have in the pipeline all hang in the balance of Brexit, and come 29 March 2019, the Government could be forced to deliver a new budget that retracts many of these proposed reforms. While Number 10 has tried to suggest that this will not be the case, it is clearly very difficult to properly forecast how Brexit will affect the private sector once the UK leaves and the sense remains that we are merely treading water until that time.”
Richard Green – CEO and founder of Evvnt – an online event promotion platform
IW Capital CEO and Founder Luke Davis:
“In what may either be the most crucial or the most redundant statement prior to Brexit, it cannot be denied that Chancellor Philip Hammond has provided due acknowledgment to a nation of entrepreneurs who will lead the charge for a buoyant private sector post-Brexit. The UK’s alternative finance arena, albeit buoyant, will only flourish to its optimum capacity if fiscal and policy-led initiatives such as business rates, Entrepreneurs’ Relief, VAT, and corporation tax are addressed head-on, particularly with Brexit around the corner.
A cookie-cutter approach for what is one of the most diverse spectrums of business to exist globally is destined to fail, but what Hammond has addressed in today’s statement is the exact opposite. By clearly identifying superior support structures for start-ups, such as the Digital Services Tax and slashing business rates for retailers under the £51,000 cap highlights the Government’s continuing support for growing businesses.
I am reassured by many of the measures announced in today’s Budget – in particular, the feasibility study into DC pension funds directed to high-growth SMEs and new business investment measures. The UK’s entrepreneurial economy is well equipped for a resilient post-Brexit future.”
Christoph Rieche, CEO and Co-Founder of iwoca, said:
“Cutting business rates will come as welcoming news to thousands of independent retailers like Champ’s Barbers who we helped expand into a second premises earlier this year. At a time when jobs and economic growth are more dependent on the success of this sector than ever before, the Government should be clearing the way for British businesses to thrive. It’s taken a step in that direction today.”
Rieche continued: “We believe the Government’s focus should now be on making it easier for small businesses to grow. The British Business Bank recently found that one-in-three British SMEs are unsure how to expand their business even though they want to. By reforming access to working capital through more initiatives like the Bank Referral Scheme and RBS alternative remedies package, the Government could fix a broken bank lending market and give more of a helping hand to the small business owners that keep the UK ticking.”
Mark Tighe, CEO of Catax:
“While the Chancellor repeated his commitment to making the UK a world leader in enterprise and innovation, it was disappointing he did not give this more of a focus in his speech, leaving out the detail on plans to support science and productivity to be looked up in the Budget Red Book.
“He announced a PAYE restriction on SME R&D tax relief which though designed to prevent abuse of the system sends out a negative message to SMEs that wish to innovate and benefit from the tax relief. This anti-avoidance rule will impact genuine claims made by technology start-ups where their payroll costs are low.
“There is already a widespread lack of understanding about what constitutes R&D and who is eligible for this tax relief which was designed to boost innovation across all sectors. We were hoping to see R&D tax relief receive a further boost rather than increased restrictions. At the very least the government must address the confusion over exactly who can and cannot claim for R&D if it is to see the virtuous cycle in which R&D tax credits reinvested in further R&D spread across more sectors. There was good news for innovative companies generally, with £1.6bn funding for certain technologies such as AI, nuclear fusion and quantum computing announced, and increasing the Industrial Strategy Challenge Fund by £1.1bn. There will be further funding to support fellowships for technology based programmes and to support Catapult Centres.
“The Chancellor did announce some positive changes to boost innovation including the increase in annual investment allowance from £200,000 to £1million for two years. This includes a tax relief for IP rich businesses so will stimulate general business investment but also reward the businesses that innovate most to create new products and services. Additional relief on ‘non-residential structures’ should provide further encouragement for businesses to invest in bricks and mortar, machinery, equipment and more but this was offset by a reduction in the Capital Allowance Special Rate Pool from 8 per cent to 6 per cent.”
Rael Sarembock, Co-founder and Partner of Capital Step responds:
The chancellor today announced:
- Nearly 500,000 small businesses will be affected by the Business relief package, knocking up to a THIRD off their VAT tax bills
- Devolved funding: £150 million for a Tay Cities Deal, £120 million for a North Wales Growth Deal, £350 million for a Belfast City Region Deal and opening negotiations on Derry/Londonderry and Strabane City Region Deal.
“The announcement of the revised Business rates relief is a welcomed initiative, the £900m relief will apply to small retailers who desperately require policy backed initiatives to benefit entities making a living out of the UK’s big cities. Hammond has provided a much-needed nod to the small retailers and business owners who form the lifeblood of the UK’s bricks and mortar economy. The Chancellor has gone further by announcing that fuel duty will be frozen for the ninth year running – key initiative for many small businesses who rely on cars and vans for their core operation to function. Small businesses in the entrepreneurial arena are battling for survival amid spiraling costs associated with running a business in the UK. They urgently need support, which has been catalysed by the slashing of business rates by a third for those who most desperately need it.
“Disappointingly, what hasn’t been addressed today is the vital issue around VAT- the most time-consuming levy for small business owners to manage. A small registered firm loses six working days a year to VAT compliance on average, draining their productivity. The Chancellor needs to consider a smoothing mechanism as recommended by the Office for Tax Simplification – to address the issue of small firms bunching around the £80,000 turnover mark. Doing so would incentivise small business growth rather than the current trend for businesses in the regions, which is to cap trade to fall under the current threshold”.
Jenny Tooth, CEO of the UK Business Angels Association:
‘While this was a challenging period for the Government, it is great to know that Budget amendments have not come at the expense of a thriving entrepreneurial community. The Entrepreneurs’ Relief is an incentive for entrepreneurs to set up, grow, sell and re-invest into UK businesses and to contribute to the nations thriving economic environment. Chancellor of the Exchequer, Phillip Hammond stated that entrepreneurs are at the heart of our dynamic society, this is very much the case and the UK’s entrepreneurial spirit will continue to boost our thriving economy throughout Brexit negotiations. Resilience planning for Brexit now needs to be of the utmost importance across the UK’s business agenda to ensure a Brexit-proof economy.’
Will Fraser-Allen, deputy managing partner, Albion Capital:
“The Treasury’s decision to facilitate large scale pension scheme investment in high-growth businesses is a landmark move that adds the last piece of the puzzle to the patient capital funding pipeline. An appropriate allocation of pension scheme assets will enable young companies that achieve initial scale with early-stage venture capital support, such as VCTs, to access the funds they need to develop through their next stages of growth.
“Pension schemes are a natural source of funding for scale-up businesses. We welcome this decision and look forward to contributing on the best structures to maximise the opportunities for the UK’s entrepreneurs building the successful businesses of tomorrow.”
Support for tech entrepreneurs
“The Chancellor’s Budget is extremely positive for the UK’s entrepreneurs and, in particular, its thriving community of young technology companies. The Government has clearly recognised the role that tech scale-ups play in the economy and has given the green light on a range of initiatives to ensure the UK is at the forefront of business innovation.”