What does June’s Emergency Budget mean for Enterprise
Time and again we’re told that it is the small business owner and entrepreneur that will drive the country from recession. So it is unsurprising that the coalition Government’s ‘Emergency Budget’, a strategy aimed at addressing the challenges that our economy faces, contains several references and issues of high relevance to entrepreneurs and SMEs.
The ‘Emergency Budget’ which, the Chancellor said, would lead to a ‘strong, enterprise-led recovery’ announces the abolition of the Regional Development Agencies (RDAs), reducing the headline rate of corporation tax to 24 percent over four years, extending the Enterprise Finance Guarantee Scheme, a new £1 billion Regional Growth Fund and a new national insurance exemption scheme for new businesses in the UK’s poorest regions.
The Budget has generally been accepted by businesses as a no nonsense approach to tackling the deficit. In addition to major cuts and reductions including pay freezes for public sector workers and the increase of Value Added Tax (VAT), the budget outlines positive steps to implement a new infrastructure of commercial activity in the UK.
Steps towards supporting businesses include plans to create the most competitive corporate tax system in the G20 and the introduction of a new Enterprise Capital Fund of £37.5m to provide additional equity finance for small businesses with high growth potential.
The budget gives a nod to the increase of low carbon economy and infrastructure ensuring that The Government is committed to moving to a low carbon economy by 2020. Steps to achieve this include the creation of a Green Investment Bank to supply individuals with opportunities to invest in the infrastructure necessary to support the green economy.
The ultimate aim of the budget is that all parts of the UK benefit from sustainable economic growth. To counter act the abolition of the RDAs, Local Enterprise Partnerships will be formed to enable improved coordination of localised economic regeneration. Further to this a Regional Growth Fund will be put in place specifically to support employment and growth. The fund, which will operate in 2011/12 and 2012/13, has been introduced to help areas most dependent on public sector employment. Private bodies and public-private partnerships will be able to bid for the funding of projects that would bring in private investment and support sustainable increases in private sector jobs and growth in their area.
For a more detailed account or to access the complete budget please follow this link:
http://www.hm-treasury.gov.uk/junebudget_documents.htm