Government Announces SME Tax Break
30th January 2014
Coalition Announces it will Deliver over £400m in Funding for a New Business Initiative The government has announced it will pump £415 million into the economy in an attempt to create jobs and help local economies to "thrive".
Eric Pickles, communities secretary and Conservative MP, stated that £300 million of the fund would be used to give SMEs across the country £1,000 off their next tax bill. To be eligible, companies have to have a rateable value of less than £50,000. Some 300,000 companies will be affected by this move and it is hoped that firms will use this money to hire new staff or invest in research and development, although this is not a contractual obligation. A further £100 million will also be put towards adding "critical business infrastructure" to enterprise zones across the UK. Harlow Enterprise Zone, for example, will benefit from £11.21 million to build 1.2 kilometres of new road and alter vacant land so it will be more easily utilised by companies. This project will be completed by 2015. Sci-Tech Daresbury Enterprise Zone is also set to receive government funding, with more than £3.5 million set aside for extra square footage at the popular site. The final £15 million in investment announced will be used to help universities in eight cities establish growth and innovation zones, which will benefit from tax-breaks. Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield are all eligible under the programme. Mr Pickles said the tax-break, as well as the government's substantial enterprise investments, would make a big difference. "As part of our long term economic plan, we are backing business and enterprise right across the country, helping town centres and local industries to prosper, and building a stronger economy," he added. "This money for infrastructure will transform acres of enterprise zone land and build a stronger, more competitive business environment that will create up to 3,000 jobs for hardworking people across the country." Steve Beahan, partner at the Sheffield office of Irwin Mitchell, said: -While much has been made in recent months of the recovery being seen across the economy, a lot of research and commentary has also been seen in relation to concerns among the small businesses community regarding access to finance which will allow them to develop and taken advantage of the opportunities. As a result, any measures being introduced to provide even the smallest amount of support to start-ups have to be welcomed. "The funds freed up by the tax break will be very useful to SMEs and are another sign that the Government does recognise the important role that smaller firms have to play in boosting the economy. However, we would also urge SMEs to research other incentives which may be available to help them in their efforts to expand operations. "Any small businesses with growth plans should also seek legal advice as part of the process, primarily to ensure they meet legal requirements in relation to taking on new staff or other key matters."