The British Chambers of Commerce (BCC) has called on the Government to adopt emergency tax relief for small and medium-sized enterprises (SMEs) to get them spending their cash.
The BCC says that SMEs are sitting on a combined cash pile of £120bn, as they delay investments to see what’s happening with the economy, so the business group is proposing a time-limited £1bn “first come, first served” allowance, which would allow businesses to write off the entire cost of qualifying investments against their corporation tax bills.
If the Government granted capital allowance relief up to £1m per business, then the SMEs, and mid-sized businesses in particular, which are privately owned or AIM-listed, would spend their capital, allowing them to write off the full cost of investment in machinery or new offices.
The BCC is also suggesting a £100m “growth vouchers” fund, worth up to £5,000 per small firm, to pay for assistance in areas such as accessing finance, growing the workforce and understanding the planning system.
According to the BCC, another £100m could be spent on a similar programme to help companies build sales abroad.
The employers’ group is proposing to pay for the measures by using any “under-spend” from the Government’s Regional Growth Fund and by means testing child benefit, by rolling it into the Universal Credit system, while cutting winter fuel allowances and free TV licences for wealthy pensioners.
Since the Government cannot afford to fund the trade deficit that has been running for the last 50 years, the BCC is suggesting that SMEs would be better off finding the professional help they need to grow from the private sector, rather than the Government creating new support schemes.
The plans are part of the BCC’s submission to the Chancellor for items that could be included in his Autumn Statements, which he will deliver on 5 December.
As an accountant, Sarah Jenkins, specialises in management accounting, business development and financial reporting.