More of a Budget than an Autumn Statement

05 December 2012

The impact for small to medium-size enterprises

Ruby Parmar, Head of Private Business, comments on the measures announced in today’s Autumn Statement that will impact SMEs:

An overriding theme from the Autumn Statement is that the Government wants to support enterprise and this is good for all business – but particularly small businesses.

Perhaps the key positive for small businesses is the announcement of an increase in the annual investment allowance from £25K to £250K which is intended to cover 99% of business capital investment. This means small businesses will get 100% capital allowances for a larger portion, if not all of their capital investment in plant and machinery. This should support growth and encourage capital investment.

Cancelling the planned increase in fuel duty is a measure that will see small businesses breathing a sigh of relief as this will have had an immediate impact on the day-to-day running of a business. The announcement of a consultation to expand the list of qualifying investments for stocks and shares (ISAs) to include those trading on the AIM market is also a positive move towards increased investment in smaller businesses.

On the employer side – one potential piece of good news might be that companies can give employees at least £2000 worth of free shares and that they can be completely outside the tax net. We expect more details on tax rules next week, but to take this option, employees would need to give up some valuable employment rights which may not sit comfortably with all.

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