Autumn Statement 2016: 10 key policies small businesses NEED to know
In his first - and last - Autumn Statement, Philip Hammond today revealed his plans to keep "Britain open for business". Here are the essential policy announcements for business owners...
“Britain is open for business […] and will remain the destination to do business” – These were the words from the chancellor of the exchequer, Philip Hammond, in today’s Autumn Statement reveal.
While there was a shock announcement from Hammond that the government will be scrapping the Autumn Statement (“no other major economy makes tax changes twice a year”) with the introduction of a spring statement from 2018, the raft of measures outlined aren’t likely to generate a shock reaction from the UK’s business community.
In fact, we suspect that many of the proposals – which include a £23bn National Productivity Fund and a £400m injection for VC funds – will come as a welcome surprise to start-ups and small business owners.
Startups brings you the key business policies…
1. £400m injection to help start-ups become scale-ups
Hammond outlined the government’s commitment to inject £400m, via the British Business Bank, to invest in small businesses with the potential for growth. The chancellor explained that he wants to encourage more start-ups to scale rather than making an exit to a large firm.
2. Supporting management skills for businesses
The government is going to implement Sir Charlie Mayfield’s review of business productivity by providing £13m to help businesses improve their management skills.
3. National Productivity Investment Fund
Hammond announced that the government will be launching a £23bn National Productivity Investment Fund (NPIF) to provide major additional spending to specific areas to boost productivity: transport, digital communications, research and development (R&D), and housing.
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4. …which includes “major” investment in UK transport infrastructure
As part of the National Productivity Investment Fund, the government will be providing £1.1bn funding to upgrade local roads and public transport, £27m to develop an expressway connecting Oxford and Cambridge, and £220m funding to tackle road safety.
For companies that install electric vehicle charge-points, there will also be a two year 100% first year allowance. This effectively means that companies can deduct the cost of the charge-point from their pre-tax profits in that year.
5. £2bn additional investment PER YEAR in Research & Development
In a move to help the UK “remain an attractive place to do business”, the government is set to invest £2bn more per year by 2020-2021 in innovative research. This funding will go towards R&D of science and technology such as robotics and artificial intelligence (AI).
6. £1bn investment in full-fibre broadband and 5G trials
The government will use this £1bn investment to roll-out more full-fibre broadband by 2020-2021 and will also trial 5G mobile communications.
Additionally, from April 2017, the government will provide 100% business rates relief for new full-fibre infrastructure for a five year period.
This announcement is good news for businesses, particularly those who named better access to broadband on their Autumn Statement wish lists.
7. Doubling UK export finance capacity
To make it easier for British businesses to export, the government will provide additional support through UK Export finance (UKEF) to ensure that no viable UK export should fail for lack of finance or insurance from the private sector.
8. Corporation Tax
The chancellor has confirmed that Corporation Tax (which currently sits at 20%) will fall to 17%, as per previous announcements from government.
9. National Living Wage
Hammond confirmed that the National Living Wage will increase to £7.50 an hour, as previously announced. This may come to a shock to some employers as there had been talks of it falling or being scrapped in light of Brexit.
10. Fuel duty
in 2017, fuel duty will remain frozen for a seventh consecutive year. Hammond has said that this current fuel duty freeze is the longest for 40 years.
Other notable proposals:
- The government will award £1.8bn to Local Enterprise Partnerships (LEPs) across England through a third round of Growth Deals. £556m of this will go to the North of England, £392m to LEPs in the Midlands, £151m to the East of England, £492m to London and the South East, and £191m to the South West. Awards to individual LEPs will be announced in the coming months.