In his pre-Budget report, Chancellor Gordon Brown outlined the following:
– Better access to finance options with the launch next year of Enterprise Capital Funds and a pledge to improve Venture Capital Trusts to make them more attractive to investors
– a review of the Small Firms Loans Guarantee Scheme to assess its effectiveness
– Support for a national campaign aimed at developing an enterprise culture in the UK
The Government has also pledged to cut red tape, with promises to improve the VAT flat rate scheme and changes to the R&D tax credits scheme to give companies more targeted support for research and development while reducing their compliance costs.
There will also be tax breaks for businesses that are prepared to fund childcare schemes – employers will be able to provide £50 a week for approved childcare for every member of staff, which will be free of employee and employer national insurance and income tax. There are also plans to extend Employer Training Pilots, which give companies the opportunity to offer training to low-skilled employees.
There were mixed reactions from business groups. The Federation of Small Business welcomed a reduction in red tape, but warned that similar announcements in the past had not been delivered.
George Cox, director general of the IoD, welcomed the move to stimulate enterprise and the growth of small business.
“We appreciate that at last there is a growing reaction that over-regulation is stifling business and we are pleased to see that the Government is beginning to respond to our members’ strong concerns about the red tape burden,’ added Cox.
Accountant and business advisor PKF welcomed some of the measures, but believes that not enough has been done to relieve the burden of regulation on UK business.
“The exemption of childcare costs for all employees is welcome pre-Christmas news. Whilst the limit of £50 per week is not as high as some commentators would have liked, it might be as much as most owner-managed businesses would wish to give. It offers scope for more flexible benefits and will help retain key employees,” believes James Welch, tax partner at PKF.
