As ever, the chancellor George Osborne presented his latest Budget as a raft of welcome changes for virtually every individual and business in the UK.
With May’s General Election looming large on the horizon, it was inevitable that there would be potential political ramifications on the budgetary announcements. There were claims of great successes in creating jobs and generating economic growth but there were plenty of announcements too that were specifically relevant to small and medium-sized enterprises (SMEs) around the country. Here’s a quick look at some of those.
Abolition of traditional tax returns
First of all, there was the interesting revelation that the Government is planning to abolish the use of traditional tax returns for self-employed people and small businesses. Plans are in place for new digital tax accounts to replace annual returns as collected by HMRC, with the ultimate aim being to radically streamline and simplify the small business taxation process across the board. If successful, this could be a welcome relief for anyone currently in the habit of rushing to get their annual tax returns back to HMRC in time for the January 31st deadline.
National Insurance will soon be abolished for businesses employing anyone under the age of 21. Plus, from next April, NI will no longer be due in relation to any young apprentices (25 years old and under) being taken on by an operation of any size. All of which will come as welcome, if not necessarily game-changing developments for SMEs.
There were also a number of announcements made in the recent Budget about investments to be made by the Government in months and years to come that could yet be very important for small businesses around the country.
Among them was the planned £600 million to be channelled towards the creation of ‘ultrafast’ broadband internet and mobile networks. Plus, many millions of pounds have been earmarked for investment in helping to see Manchester and the North West of England become a “Northern Powerhouse”, with improved transport links high on the agenda in that regard.
SME bank referral scheme
“You can’t create jobs without successful businesses,” the Chancellor said during in his Budget speech to parliament and the current Government has made no secret of its desire to see more money being lent to companies that are keen to grow. The reluctance of traditional lenders to extend credit to SMEs though has been a major impediment to growth in the sector and indeed the UK economy as a whole.
An important means of overcoming these issues has been the creation of what is described as the “SME bank referral scheme”, which alternative lending platforms including Funding Options have been involved in shaping in recent months. The essential purpose of the scheme is to see rejected business loan applicants pointed routinely in the direction of alternative finance solutions and service providers in the sector.
Research shows that most small businesses only enquire with a single lender as they look for potentially vital operational finance. This is despite the fact that there are an increasing variety of lenders available and ready to help SMEs in any sector. The key, therefore, is awareness of the options available beyond mainstream lenders and the referral scheme is a direct response to the current situation.
Legislation is now before Parliament that will see banks obliged to guide their rejected business loan customers towards information providers like Funding Options and we’re hopeful that the scheme will be a very significant step forward. All in all, the picture looks relatively positive with apprenticeship and funding schemes as well as massive investments in technology and digital services being put in place to help grow the SME sector as a whole in the UK.