THE Government yesterday announced a range of promises designed to stimulate growth for entrepreneurs and small businesses.
Its £2.5bn growth package includes a range of tax breaks and cuts in business rates as well as a commitment to the freeing up of credit.
To aid what Darling calls “fledgling businesses”, as well as existing ones, business rates will be cut for one year from October.
And, to “help small businesses expand”, he is also doubling the Annual Investment Allowance to £100,000.
The entrepreneur’s relief for capital gains tax has also been doubled. At present, the first £1m of lifetime gains are taxed at a lower rate of 10 per cent, rather than the main rate of 18 per cent. That threshold will now be increased to £2m.
There was also a raft of other measures, including that RBS and Lloyds between them would provide a total of £94bn of new business loans – nearly half to smaller firms. This is good news for entrepreneurs looking to sell their businesses and companies that are heavily capital intensive.
But many entrepreneurs yesterday expressed doubt about the government’s ability to deliver in the long term
Quentin Pain, founder of accounting firm, Accountz said the measures did not address the bigger picture: “The reality is that our Triple A credit status is under threat.”
SIR JAMES DYSON
The UK’s most renowned inventor yesterday summed up the feelings of his fellow entrepreneur’s towards Alistair Darling’s Budget. Although there were positives and a clear commitment from the government towards entrepreneurs, the reality is that only a small amount of businesses will benefit from yesterdays measures.
James Dyson said: “There are encouraging signs in today’s Budget. We outlined incentives for both universities and small businesses in our Ingenious Britain report. The Enterprise Capital Fund to support innovation in universities is promising. As is the extra funds allocated to create 27,000 more places, particularly in STEM subjects. In addition, there is support for entrepreneurs with the cut in business rates, the doubling of relief for capital gains tax and the increase of the annual investment allowance to £100,000.”
But Dyson also said that the measures needed to be braver in order that entrepreneurial community can continue to grow and flourish .
He added: “However, these steps do not go far enough. To rebalance the UK economy, we need to invest more in science and engineering. We need to harness the UK’s innate engineering expertise to remain globally competitive or we will be in danger of slipping behind the chasing pack. This requires long-term, investment.