For Britain’s small businesses perhaps one of the more notable announcements in the autumn statement was the further cut in corporation tax to 21 per cent from April 2014. As the UK’s growth forecasts continue to remain gloomy, businesses have been crying out for some positive action to help stimulate growth. One of the more immediate benefits is the twelve month extension to the small business property rate relief scheme from April and a ten-fold increase in the annual investment allowance in plant and machinery to £250,000 which should help businesses to plan for capital expenditure.
The Chancellor also reaffirmed the government’s intention to create a Business Bank, due to become operational in 2014, funded by £1 billion of capital, to improve business access to much needed credit and funding.
However, Gerald Irwin of Sutton Coldfield based Licensed Insolvency Practitioners and Business Advisers, Irwin Insolvency has expressed some concern as it still remains unclear just how much the government is likely to contribute and where the rest of the funding will come from. “Important questions need to be answered. For example, just how easy will it be to access the funding and who exactly is likely to allocate it? The criteria will be the ultimate key to its success.”
In reality, the bank is unlikely to be up and running for a couple of years so is unlikely to have any real impact upon the short-term problems faced by struggling businesses today.