Chancellor George Osborne’s Autumn Statement offered a mixed bag to entrepreneurs starting new businesses and the investors and lending schemes that fund them.
Although the Chancellor said that he was focusing on new and fast-growing businesses, there is still too much red tape surrounding investment and applying for funds.
For example, although the Seed Investment Enterprise Scheme (SEIS), was announced in the Budget in March and launched in April the paperwork for it was only available last month.
The SEIS was designed to help small, early stage companies to raise equity finance by offering a range of tax reliefs to individual investors who purchase shares in the company.
Unfortunately, the only other scheme to be announced to help investors fund entrepreneurs was the raising of tax relief to 100 per cent on an investment of up to £250,000 on plant or machinery.
Although the announcement of optional cash-basis reporting for the very smallest businesses was welcomed by start-ups, as the costs of compliance for most micro businesses are hugely disproportionate to their profits, so having the option of cash-basis will make the whole process easier and less expensive.
However, one cut announced in the Autumn Statement could benefit start-up businesses; since the pension tax-exempt threshold was reduced from £50,000 to £40,000, investors potentially have £10,000 to invest in start-ups, through schemes such as the Enterprise Investment Scheme (EIS), which offers tax reliefs to investors in higher-risk small companies.
The scrapping of the proposed 3p rise in fuel was also welcomed by entrepreneurs, while the extension to the rate relief scheme means that 350,000 businesses now not now pay any business rates until 2014.
Accountant, Jon Stocker, specialises in offering advice, support and guidance on matters involving personal tax planning, business decision-making and business start-ups.