As the UK braces for the Autumn Statement tomorrow, 3 industry leaders have shared their pre-budget insights, offering targeted recommendations for key reforms.
The collective call is for reforms that extend beyond immediate fiscal relief, laying the groundwork for a resilient and thriving economic landscape.
Following extensive conversations with customers and recent research, Mike Randall, CEO at Simply Asset Finance pinpoints four pivotal initiatives he urges the Chancellor to prioritise to enhance the business landscape for SMEs who have faced some of the most difficult months on record:
- Extend the Full Expensing scheme and make it permanent.
“The implementation of the full expensing scheme earlier this year, which offers businesses a 100% first-year tax
relief on qualifying equipment investments, has already proven instrumental in helping businesses invest in equipment to propel their growth. In its current capacity however, the relief will only last until March 2026, leaving a high amount of uncertainty for businesses seeking to build a long-term plan for their growth.
“Our recent research into the small business landscape found that solving business productivity continues to be the most pressing concern for almost three-quarters of businesses in the coming years, yet just one in five can actively invest in new equipment or machinery to counteract this.
“We understand the Chancellor is set to be considering an extension to the full expensing scheme in his statement, which we believe would help to provide much-needed reassurance to businesses looking to solve productivity issues in the short term. However, we still urge the Chancellor to consider the benefits of making this relief permanent to cement the UK as a leading enabler of small businesses, while giving them certainty for the future.”
- Build on the success of the Recovery Loan Scheme.
“Having been directly involved with the rollout of funds via the Recovery Loan Scheme (RLS), we’ve recognised first-hand the impact it has played in guiding businesses through the pandemic period and has continued to play in their ensuing recovery. With the RLS scheme now set to conclude in 2024, we think it will be imperative for the Chancellor to consider its legacy, and where further support can be applied.
“Having now emerged out of the end of a global pandemic, a lot of small firms have once again been able to turn their attention to sustainability. From observations of our customer base however, and with the government’s recent U-turn on certain green targets, there is still a high amount of uncertainty around how and when firms must meet these targets. This has been directly translated into the value of green equipment, which we’ve now seen in some cases become significantly less attractive compared to their non-green counterparts. And without an incentive to purchase green equipment, firms are finding it hard to justify the investment, or in some cases deprioritising it.
“Given the government’s commitment to net zero regulations, facilitating access to finance for businesses to invest in sustainable technology, while incentivising them to do so, will be crucial for the formulation of robust, long-term business plans that align with government mandates.”
- Build a longer-term plan for levelling up the nation
“The uncertainty stemming from the government’s reconsideration of various infrastructure projects, such as the well documented HS2 railway, has left a notable absence in the plans of many businesses that were reliant on its success.
“While it was encouraging to see the Prime Minister focussing on the future of AI and technology innovation, there are still vital infrastructure needs across the country that must be solved. SMEs are seeking assurance of a stable economic landscape to counteract recent hesitations surrounding regional investments.
“Whether it is addressed in the Autumn Statement, or further afield, we want to emphasise the necessity of a long-term strategy that extends beyond the typical six-month horizon we’ve seen in recent years. This extended planning horizon is essential to provide SMEs with a clear trajectory for growth, while instilling the confidence they need for substantial investments in the future.”
- Follow-through with tackling late payments
“Earlier this year, the government implemented measures to tackle the issue of late payments to SMEs which encompasses extensions to reporting regulations, enhanced advice on negotiating payment terms, and expanded powers for the Small Business Commissioner. Given that SMEs constitute approximately 99% of UK businesses, the protracted issue of delayed payments and extended terms has long impeded economic growth. While the initiated measures represent a significant step forward, we’d like to see a clear plan moving forward that sustains and builds upon these efforts. To fortify the resilience of SMEs, ongoing consultation and guidance will be essential components for ensuring the efficacy of these measures.”
Independent consultancy Magnetic urges the government to give more support to businesses looking to innovate. Jenny Burns, CEO at Magnetic, said: The last year has been one of the most challenging for businesses in recent history, with many struggling to battle with the cost-of-doing-business crisis created by high interest rates and stubborn inflation.
The harsh economic landscape that has defined the last 12 months is exactly why the Autumn Statement will carry more weight than ever. “While the Chancellor is expected to announce business tax cuts to prevent a recession next year, this is not enough. The Government must instil a sense of confidence in firms that allows them to plan and spend to thrive long-term, not just survive the coming months – in turn, this will create economic growth, as business investment makes up
about a tenth of UK GDP. “Our new research found that the country’s c-suites are crying out for support to be able to innovate. Costs were found to be the largest reported barrier to innovation initiatives, with around a third of respondents saying that government grants and tax relief would help them to invest more in innovation (38% and 31% respectively). It is innovation and growth that will spur on Britain’s economic recovery – it must be a priority for policy-makers.”
Accountancy and audit expert Vipul Sheth, MD of accounting and auditing outsourcing firm AdvanceTrack has made various demands of the Chancellor, including to help SMEs by increasing the allowance for Entrepreneurs’ Relief – while protecting the ‘crucial’ Business Property Relief scheme, amid speculation over reforms to Inheritance Tax.
Sheth said: “This Autumn Budget could be career defining not only for the Chancellor but this Government. Amidst speculation on Inheritance Tax reforms, safeguarding the Business Property Relief scheme is imperative. Designed to reduce the amount of IHT payable on certain business assets and support family-owned businesses to carry on trading after a death, this scheme is indispensable for many of our most successful firms.
Any plan to remove this would be ill thought out and a tax grab on hard-working entrepreneurs that discourages anyone from building a business. While politically challenging, it’s crucial to recognise the substantial contribution of private businesses, which add £575bn to the economy and account for over half of private sector employment.
Elsewhere, I’d also like to see the allowance for Entrepreneurs’ Relief increased. It was previously unlimited, but successive Chancellors have reduced it to just £1m. Implementing any policy that does not encourage entrepreneurship will make the country poorer. They should not see it as a fat cat tax, since the people who make use of it are predominantly small business owners, many of whom have worked for decades and come to sell their business at retirement.”