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Autumn Statement 2014: What’s in it for small business?

Last week’s Autumn Statement saw some significant wins for small businesses in response to the lobbying of organisations like ourselves in the run up to the Chancellor’s announcement. We put forward a number of policy recommendations on behalf of our member businesses and were pleased to see that many of our key calls were answered.

Business rates

The Forum has consistently campaigned for a review of business rates as a tax since 2011, and most recently in March 2014 before the Budget. In our most recent survey, 55% of members felt that business rates are now a barrier to business development.*

The announcement of a review last week was an unexpected surprise, but any review is not likely to take place until 2016 and the devil will be in the detail as to whether the recommendations will lead to a better system of property taxation. We’ll continue to lobby for all parties to commit to making concrete moves to tackle this issue in the run up to May 2015. We also want to see any review include mechanisms to allow businesses to challenge the Valuation Office Agency more easily and have discounts etc administered automatically.

We were also pleased to see the Chancellor take on board our submission suggestions of short term measures to reduce the pain of excessive property taxation with continued a continued cap of 2%, a £1,500 discount for retail properties and an extension on Small Business Rates Relief.

Fuel duty

In early 2014 we produced a briefing paper on Fuel Duty pushing for the freeze to continue for the remainder of the parliament, and arguing that the tax take of around 58% for petrol and 59% for diesel was more proportionate than 86% which had been the tax take in 1986. We repeated this call in our Autumn Statement submission.

We’re delighted that our calls were answered on the continued freeze, one of the key ways in which the Autumn Statement has helped businesses, as the government has postponed or cancelled proposed increases since Budget 2011. It is now 8p lower than it would have been with the fuel duty escalator (a 1p rise above inflation) saving businesses around £1,200 since 2010.

Access to finance

Announcements of additional funding for the Business Bank, Enterprise Guarantee Scheme and the extension of the Funding for Lending scheme were also welcome measures to address ongoing small business confidence issues around the ability to obtain the finance they need to grow.

The Forum will also continue to push for a moratorium on bank branch closures until the government looks at the concept of shared bank branches. Currently around 1,300 communities do not have access to any bank and this makes cash deposits problematic.

Exporting

The Forum had wanted an export tax credit that supports investment in new markets, working along the lines of research and development (R&D) investment, this would support export investment by off-setting it against corporation tax. While the £45 million for new exporters announced in the Autumn Statement is a welcome move it is unlikely to be available to existing exporters and we feel that the money would have been better spent on the above.

HMRC focus on multinationals

The Forum has made repeated calls for the focus on tightening the tax regime to concentrate on tackling the tax avoidance of large corporates such as Amazon, Google and the banks who were paying little and not tax efficient small businesses.

We welcome the government’s promise to clamp down on tax avoidance by multinational companies by introducing a new tax from April 2015.

Tax administration

In contrast to other small business groups, the Forum expressed immediate concern at the proposals to allow HMRC to directly debit the banks of small businesses without their knowledge and a call to reconsider these proposals featured in our submission.

While not featured in the Chancellor’s speech we are delighted that the Treasury has responded at the end of last month to our concerns and will be introducing additional new safeguards including the right to appeal.

If you’d like to find out more about how the Forum lobbies government on behalf of small businesses, email policy@fpb.org or call 0845 130 1722.

* Referendum 209

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