By Amanda Vigar, Managing Partner, V&A Bell Brown LLP
help thinking the Budget was a wasted opportunity. There were some good
things in there for smaller businesses, but there were also measures
that should, and could, have been included. Add to that it was a Budget
of “jam tomorrow”; all in all, it was rather a let-down.
in mainstream Corporation Tax won’t directly help smaller businesses,
but it will help to attract overseas businesses to set up in the UK. The
Employment Allowance is good news as well as the first £2,000 will be
taken off employers’ National Insurance bill. This will mean that many
small businesses will no longer have to pay employers’ NI. For a small
business owner who is thinking about taking on their first employee a
huge barrier will be removed. That’s the good news.
biggest Budget disappointment for small firms was that George Osborne
did not announce any curb on business rates and there was no reduction
in the rate of corporation tax for smaller businesses. Rates will have
risen 13% in three years at a cost to retailers of about £175m a year.
lending to small businesses down 25% in real terms since its peak in
2009, and almost 10% lower than in 2006, I’m also disappointed that
there was no announcement on the Business Bank that has been advocated
by the business secretary, Vince Cable. Whilst we don’t want to go down
the road of what was tantamount to irresponsible lending in the early
years of this century, the tides have turned too far the other way in
more recent times. The proposed Business Bank will not lend directly to
small businesses, but will give advice on suitable facilities and
schemes as well as providing cheap wholesale finance for alternative
lenders and so called 'challenger banks’.
More and more
businesses feel there is no point in even trying to raise finance to
grow, and that’s a real concern in our fragile economy. Baby steps are
not what we need right now. We need real action that can give smaller
businesses the kick-start and confidence they need to grow and survive.
It’s tough out there and there is little real sign that it’s going to
get any better fast. So, even though I’m not an advocate of government
meddling, I do think that the Coalition should act on lending. There are
private finance initiatives springing up, but these need to be
co-ordinated, and the Business Bank could certainly help. A client who’s
been in business for about twenty years said to me the other day that
he wouldn’t have been able to get his small business off the ground had
he been starting out today. The barrier is, of course, the lack of
finance out there. So, come on Coalition, put some real timescales in
place for this new bank, as it’s a good idea, but now’s the time to put
your money where your mouth is!