George Osborne announced his spending review last week, and there are some interesting points to draw upon for all UK businesses. The Chancellor’s Autumn Spending Review delivered mixed bag for small to medium sized businesses. It gives a few breaks with one hand, yet takes away with the other. Let’s take a closer look at some of the effects that the spending review will have on UK companies.
There will be cuts to the Department of Business, Innovation and Skills, totalling 17% of its previous funding. But, the science budget has been given a boost, and it will rise to £4.7 billion.
Small businesses should get a boost from the small business rate relief scheme. 600,000 businesses will enjoy the extension of the program. The system allows businesses 100% relief on properties with £6,000 rateable value, with a sliding scale up to a value of £12,000. That rate will continue for at least another year, which will mean many more businesses can benefit. After that point, however, it is unclear what will happen. It could see many companies opting instead for buying used modular buildings or renting in other areas. It might well be a much cheaper option than buying business property in expensive city centre locations.
An apprenticeship tax will come into force from April 2017. It will see a rate of 0.5% added on top of an employer’s pay bills, although there will be a £15,000 allowance. That will mean 98% of all companies won’t have to pay any levy at all. Apprentice schemes are also heading for a change. There will be new standards to comply with, set by business leaders in a new, independent body.
Rural and less popular areas will receive a boost from being given the funds to create enterprise zones. There are plans for 26 of these zones to be set up in 15 different towns and cities from all over the country, including Ipswich and Carlisle.
Transport spending appears to be a perfect example of the double-edged sword the spending review has provided for business. The Department for Transport’s budget will receive 37% less funding, but on the other hand, capital expenditures are up by 50%. It will allow the government to go ahead with their plans for a large-scale investment in roads. Businesses who rely on making deliveries will take heart from the latter. But, they should take care as the DfT cuts will have an unknown effect at some point in the future.
As every employer knows, childcare is a critical factor for their employees. And, it’s received a boost in the form of more free childcare, of up to 30 hours per week. All families with 3 and 4-year-olds will benefit, assuming they work for more than 16 hours a week and earn less than £100,000.
So, how will the spending review affect your business? Will you get a welcome boost to your coffers, or do you have concerns? Let us know in the comments section below.