Budget 2014: Entrepreneurs give their verdict on Osborne’s report

Following the Budget announcement today, entrepreneurs discuss whether the chancellor's economic plans do enough for small businesses and start-ups

Focusing largely on exports, manufacturing and saving, the chancellor of the exchequer’s Budget Report has divided entrepreneurs, with many arguing Britain’s small businesses and start-ups have been largely forgotten.

We hear from business owners who share their verdict on how far this year’s Budget supports the UK’s small business landscape.

Shalini Khemka, CEO, E2Exchange

“This was a broadly pro-business Budget but not explicitly enough pro-small business, which represent some 60% of the private sector workforce and account for nearly half of private company turnover.

“Re-balancing the recovery away from a dependence on debt and consumer demand, to exports and business investment is vital so it’s very welcome that the chancellor has used this Budget to double the investment allowance to help deliver a more sustainable recovery.

“However, start-ups and small and medium enterprises are still finding it difficult to access funding so this is a far more important issue that still needs to be addressed.”

Xenios Thrasyvoulou, founder, PeoplePerHour 

‘The chancellor said at the start of his speech that this would be a Budget for ‘doers’ which you would assume included small business owners and entrepreneurs. However apart from making it more affordable to hire under 21s by removing them from jobs tax and increasing the Annual Investment Allowance (AIA) to £500,000, there wasn’t much else to give aspiring small business owners any confidence that the government has their best interests at heart.

‘The government need to go further. You only need to look at Silicon Valley and the number of great companies and ideas that hail from there to see what the effect of a tax structure that nurtures and encourages startups can do. In the UK, start-ups are the backbone of the economy and make large contributions to growth and lowering unemployment, yet they pay the same VAT, corporation tax and income tax as large corporations.

“Unless bigger and more fundamental changes are made to tax structures and business education little will change.”

Ben Halford, chief executive, Surface Generation

“The announcement that the government is going to double the available finance for companies exporting to £3bn and that interest rates on this will be cut by a third is welcome news but the amount is not enough and we will have to wait and see how easy it is to access.

“Similarly, the news that the annual investment allowance (AIA) for companies will increase and that the government will raise the rate of R&D tax credit payable to loss making small and medium sized companies is welcome, but again it does not go far enough.

“The chancellor said that over the next five years it expects its changes to support £1.3bn of investment in innovation from small businesses, which is nowhere near big enough to make a significant change.”

Raj Dhonota, Apprentice contestant and founder, The Start Up Fund

“A Budget for ‘makers, doers and savers’ but not businesses. This was a budget for voters and not for businesses. Where were the measures to encourage more people to start businesses?  Small and medium businesses are the lifeline of our economy and for me the budget forgot them because of the political need to woo voters.

“What’s going to happen next year before the general election? Is it going to be two years of wooing voters at the expense of start-ups and small businesses?”

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  1. I believe given the rather stacked deck that the Chancellor is still having to play with, this was a pretty good budget for small businesses that have a “product”. It may not be great for all of those small businesses that are offering a service, but the aim of the government over recent years has been to bring back manufacturing and to introduce a high-tech, innovative culture back to the UK.

    By increasing the Research and Development Tax Credit to 14.5%, a young, loss-making company developing a new product, a new app, or a new industrial process can now (from 1 April 2014) get tax relief of around 33% of its allowable Research and Development spend back as cash in the pocket. That’s pretty good access to funding, if you know about it, understand it and more importantly claim it. Combined with the additional help announced for export finance if you are “a maker” then I think you will be pretty happy with the budget.