Budget 2015: What do small businesses want?
From tax incentives to regional support, UK entrepreneurs discuss the policies they want the chancellor to tackle in Wednesday’s 2015 Budget report…
In the run up to the chancellor of the exchequer’s 2015 Budget report next Wednesday 18 March, we asked entrepreneurs and owners of fast-growth small businesses from across the UK to tell us the key policy announcements they want George Osborne to address.
With this year’s budget so near to May’s General Election, it’s unlikely the chancellor will be announcing any drastic policy changes but, as far as small business is concerned, it's clear that there will need to be more measures to support the UK’s enterprise landscape.
Raise the SEIS and EIS threshold
James Codling and Paul Movarek, co-founders of equity crowdfunding platform VentureFounders, want the chancellor to encourage more people to invest in UK businesses through the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS):
“Firstly, we call on him to increase the amount that can be raised by companies under SEIS from £150,000 to £250,000 to give these early stage businesses the capital they need to achieve their growth potential. This will ensure that more money is being invested in fledgling businesses, and that investors are rewarded with tax efficient ways of making investments in UK Plc.
“Second, and equally as important, is being able to raise sufficient equity capital at the outset of a new venture in order to enable these entrepreneurial businesses to grow without constraint. We firmly believe businesses should be able to raise capital concurrently using both the SEIS and EIS schemes. Under the current rules, a company can only issue new shares and bring in more capital once it has spent 70% of its SEIS money. Raising investment takes a considerable amount of time and effort; management is best served running the business rather than continually meeting investors and fundraising.
“Entrepreneurial businesses are the catalyst for economic growth and a great number of new jobs are created by businesses under five years old. The recommended changes in these allowances in next week’s Budget would send out a positive message to would-be investors and entrepreneurs that this government backs entrepreneurship, jobs, and wealth creation for the benefit of all.”
Keep Entrepreneurs’ tax relief levels
Robert Jakobi, managing director of popcorn brand Metcalfe's Food Company, wants Osborne to keep entrepreneurs’ tax relief as it is:
“In his Budget statement I would like to see the chancellor make a commitment to continue this hugely beneficial tax break for small firms, rather than reducing the limit for qualifying gains that is currently set at £10m.
“Entrepreneurs' tax relief provides a fantastic incentive for business owners to grow their companies, invest in innovation and to take on more staff – something that is vital to the future success of the UK economy.”
Cut VAT rates for health and sports products
At the top his budget wish list Elliot Dawes, co-founder of sports supplement company BULK POWDERS, lists a fairer distribution of VAT rates across all industries:
“This will ensure that small and medium enterprises who have suffered from the government targeting the ‘taxable low hanging fruit’ are not marginalised out of business.
“For example, almost two years ago the government introduced VAT on sports nutrition products – a black day for people all over the country dedicated to fitness and self-improvement. It is evident there is a massive gap that needs closing as politicians tax good health but leave pasties and cake at zero rate.”
Incentives and tax relief to boost exports
Philippe Gelis, CEO and co-founder of P2P exchange platform Kantox, argues the case for Osborne to introduce policies to help small businesses get out there and export:
“Economic recovery has been flourishing, but small businesses need to be supported in order to continue this growth. A tax relief for the costs of researching entering a new export market would be welcomed with open arms – this is a move supported by the British Chamber of Commerce, amongst other significant business organisations.
“With China’s International Payments Service nearly ready to be launched, this would be the right time for businesses to consider how they can take advantage of the Chinese economy and escape the uncertainty of the unstable Eurozone.”
Purple WiFi CEO Gavin Wheeldon agrees with Gelis but believes research and development tax credits may hold the answer to opening up exports:
“I would love to see something like an R&D tax credit for exporters. Currently, all export incentives are aimed at the sales of goods rather than services or licensed IP, which is a bit back to front given the way the UK economy is balanced. We need something that encourages companies from all walks of life to start looking at opportunities to export.”
Match support for London in developing business hubs
Brand agency Purposes’ founding partner Giles Redmayne hopes the chancellor will announce additional measures to help start-ups and small businesses across the country, not just those in London:
“Like many business owners, I fully support the plan to reduce corporation tax to 20%, but one would hope the chancellor will announce more measures to help and encourage growing businesses across the country.
“More attention needs to be paid to the thriving entrepreneur and start-up communities based around the UK, especially the developing hubs in cities such as Birmingham, Bristol, and Manchester. While all fast growing businesses need to be nurtured in order to succeed, it’s important to look at, and bear in mind, the networks located outside of the capital also.
“Naturally, small and medium businesses operate differently around the UK, so the incentives and support we have in London needs to be replicated and adapted to suit their specific needs and requirements. In practice, for businesses to continue to grow and succeed, they need to be given greater access to funding, lending, and support around recruitment of specialist skills and encouraged in their future endeavours.”
More employer tax breaks and funding to train tech talent
RED Driving School CEO Ian McIntosh feels there needs to be more of a focus on helping employers access talent and wants the chancellor to address employment in the report:
“The best help for companies providing consumer services is high employment levels. I would like to see the government increase its commitment to getting young people into employment and this could be any number of incentives, which would be most helpful. An example would be to offer financial support in the form of tax breaks for employers taking on people under 25 years old.
Simon Hill, CEO of idea management start-up Wazoku shares McIntosh’s view but also calls for more government support to help businesses access technology talent:
“I would love to see further legislation to help promote innovation or support the job creating small and medium enterprises via greater tax breaks, especially around PAYE/National Insurance. I feel that as the owner of a company with an ever-growing number of employees, far more could be done to help small businesses in this area. Also, there is a major shortage of tech talent in the industry currently, so access to training capital that businesses could use centrally for recruiting ‘raw' tech talent to train would be a huge plus.”
What business policies would you like to see addressed in next week’s Budget report? Let us know in the comment box below or share your views on Twitter by tweeting @startupstowers