An essential summary of the chancellor’s plan for boosting enterprise and reigniting growth
After delivering the unwelcome news in today’s Budget Report that 2013 growth expectations have fallen from 1.2% to 0.6% since the Autumn Statement, the chancellor of the exchequer George Osborne outlined a number of measures to boost the economy through innovation.
Leading with the overarching message that the 2013 Budget is aimed at “those who aspire to work hard and get on”, Osborne revealed his plans to boost enterprise and reignite growth in the UK economy. Key among those were offers of support to those who wish to start a business, employ staff, find investment and grow their companies.
Startups has taken a closer look at the 2013 Budget Report to reveal the key plans set to affect small business owners and start-ups.
From April 2014, the government will provide business owners with £2,000 off their employer National Insurance Contributions (NICs) to help them to hire new staff. This is particularly aimed at small businesses expanding their staff base, or taking on their first employees. Consequently, every business will be able to employ one worker on a salary of £22,400, or four employees working full-time on the adult National Minimum Wage, without paying any employer NICs.
More power to regional cities
Taking on the advice of Lord Heseltine in his review of economic growth No Stone Unturned, the government is devolving some power from central government to Local Enterprise Partnerships (LEPs), formed of local councils and businesses. A single Local Growth Fund is to be developed by April 2015, which will be split between LEPs through Local Growth Deals, placing funding decisions to support local business and welfare in the hands of the specific regions.
Investment in start-ups and small businesses
Those who invest in start-ups will be rewarded by an extension of Capital Gains Tax relief. Investors will receive relief on capital gains arising in 2013 to 2014, as long as they are reinvested in that year, or the following year through the Seed Enterprise Investment Scheme (SEIS). To be eligible for SEIS, companies must have less than £200,000 in assets and fewer than 25 employees.
In addition, stamp duty on AIM shares will be abolished from April 2014.
Support for social enterprise
In an effort to encourage private investment in social enterprises, the government will provide tax relief to investors, to be introduced in Finance Bill 2014.
Loans for start-up businesses
The Start-Up Loans Scheme, designed to support young entrepreneurs received a £30 million boost from government in January 2013, taking the total fund to £112m. The announcement also saw the upper age limit lifted from 24 to 30. The fund has subsequently been raised again to £117.5m after the initial pilot scheme fund was fully allocated and extended, due to demand.
The Small Business Research Initiative (SBRI), designed to support companies to develop new technologies has received a boost. Currently businesses compete for £40m government contracts to develop technologies that support the public sector; it was today announced that these contracts will be increased to £100m in 2013-14 and £200m in 2014-15.
In addition, the Technology Strategy Board is set to launch a new competitive fund of up to £15m to support the digital content production industry. Funding for the Skills Investment Fund, made up contributions from film productions will also be increased to £8m each year over the next two years, with government match-funding industry contributions.
From April 2013, the government will provide £140m over two years to support more small and medium-sized business exporters and attract overseas investment.