The Autumn Statement is a big deal. In fact, many consider it to be the sixth most anticipated day in December, after Christmas Eve, Christmas Day, Boxing Day, New Year’s Eve and Remembrance Day.
The Autumn Statement was particularly important this year, as it’s the last one before the next general election. Sparks were set to fly in the Commons – and boy they sure did – with George Osborne making a joke about Ed Miliband looking like Wallace from Wallace & Gromit, and Ed Balls defending his chum by suggesting Mr Osborne was into S&M.
All that hilarious parliamentary banter aside, there actually were some interesting announcements. Here’s a summary of what the Autumn Statement meant for small businesses.
Double Small Business Rate Relief extended
Since 2010, Government has doubled the amount of business rate relief for small businesses. This has now been extended until April 2016. Until then, if your business premises have a rateable value of £6,000 or less, you will receive 100% rate relief rather than the usual 50%.
For those with premises valued between £6,001 and £12,000, relief will be calculated on a sliding scale from 100% to 0%.
The government will also carry out a review of the future structure of business rates to report by Budget 2016.
Fresh crackdown on false self-employment
Although not touched on in George’s Commons speech, the Autumn Statement 2014 report states that changes will be introduced to tighten the eligibility conditions for those claiming tax credits on the basis of self-employment, to prevent abuse of the system.
The plan is to introduce a new test to ensure that work being undertaken is “genuine and effective”, as well as a requirement that anyone claiming Working Tax Credit as self-employed registers with HMRC and provides their Unique Tax Reference.
You should note that these measures only apply to sole traders and should not be confused with IR35 laws, which apply to contractors with limited companies.
Funding boost for SMEs
The Funding for Lending Scheme (FLS), introduced in 2012, has been extended for one year until 29 January 2016. Through the FLS, the Bank of England lets commercial banks borrow funds from it cheaply, so that the banks then pass this on in the form of cheap loans to SMEs.
In addition, it was announced that the Government will provide a further £400 million to support venture capital through the British Business Bank’s Enterprise Capital Funds programme, as well as further funding for the Enterprise Finance Guarantee scheme, facilitating up to £500 million of new lending in 2015-16.
Plans were also announced to help boost SME business by improving digital infrastructure. The government plan to deliver superfast broadband to 95% of the country by 2017, and announced that it will provide up to £40 million to extend the SME connection voucher scheme to March 2016, and to more cities. Vouchers will be available on a first come, first served basis.
There are also plans to speed up the process of debit and credit card payments. From January 2015, the majority of acquirers will offer a new service for small businesses to receive the funds from debit and credit card transactions much more quickly.