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Autumn Spending Review 2015: impact on small businesses?


The Autumn 2015 Spending Review has been followed by a rash of seemingly contradictory takes on the impact for SMEs. Read on to get the true picture.

While the Spending Review was wide ranging, with most attention focused on housing and pensions, there were potentially important developments for small to medium sized businesses.

At a glance:

  • Small business rate relief scheme – will be extended until April 2017, a move that Chancellor George Osborne claimed means around 405,000 of the smallest businesses will get 100% relief from business rates, with a further 200,000 benefiting from tapering relief.
  • Finance – should be more accessible for SMEs when the Government arranges for Experian, Equifax and CreditSafe to receive SME credit information from designated banks and provide equal access to this information to all financial providers.
  • Apprenticeships – A new business-led body will set standards for apprenticeships. An apprenticeships levy will come into effect in April 2017, at a rate of 0.5% of an employer’s pay bill. A £15,000 allowance means that the vast majority of employers will pay no levy although it has been described by critics as a new payroll tax.
  • Northern powerhouse – A £400 million northern powerhouse investment fund will apparently help small businesses grow.
  • Business rates – are to be set by local authorities, offering councils the potential to make areas more attractive through cheaper rates. Elected mayors will be able to raise rates on the condition the money is used to fund specific infrastructure projects supported by the local business community.
  • 26 enterprise zones – will be created, including include 15 zones in towns and rural areas ranging across the country.
  • Department for Business, Innovation and Skills (BIS) – will suffer a 17% cut.
  • Transport – spending will increase by 50% to a total of £61 billion, focusing on improving north-south links with the HS2 in line with the plans for a ‘northern powerhouse’. Electrification of rail lines such as the TransPennine, Midland mainline and Great Western will be accompanied by an £11 billion investment in London transport infrastructure.
  • Free childcare – from 2017 for working families with three- and four-year-olds. Parents working more than 16 hours a week and with incomes of less than £100,000 can get 30 hours of free childcare.

 

Better business energy?

There is much to laud in the Spending Review. But there are risks. Allowing local councils to set business rates could be a double-edged sword. The potential to boost regional economic prosperity is balanced by a risk of uneven competence in understanding the pressures SMEs are under.

Costs are an increasingly important issue for small to medium sized businesses. The Review promised to “announce shortly important steps … to improve competition, [that] will improve markets, reduce household bills and support productive businesses.”

While welcome, there is too little detail to be sure as to whether this will actually help the companies that are still suffering in the ‘great British business rip off’.

Sceptics may be concerned at remarks about “overly restrictive regulation”, which the Government claimed can “put the brakes on the competitive process and favour incumbent firms and established business models”.

While this does not refer explicitly to the business energy market, SwitchMyBusiness.com has previously campaigned for better protection for businesses losing out as the ‘forgotten sibling of consumers and corporates’.

Fortunately, you don’t have to be left out in the cold as winter bites. Our sector leading business energy switch service (we are the highest rated business energy provider on independent ratings site TrustPilot) can offer you the best deals in only 20 minutes so give us a call on 0330 0100 251 (or request a call back using our form) now to start saving.

Our dedicated pages have lots more information about business gas and business electricity.

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