Billions extra for small firms to fire growth and ‘ put money in pockets’
RISHI Sunak vowed to “unleash the power of business” with a multibillion pound Budget boost for small firms and entrepreneurs yesterday.
The Chancellor unveiled a host of new measures to help companies flourish across Britain.
They included a £ 5billion boost for exports, as revealed by the Daily Express, to encourage overseas buyers to snap up UK goods and services.
He also announced £ 130million for start- up loans to fire up growth, £ 200million for a British business bank, £ 200million for life sciences, and help for entrepreneurs.
Mr Sunak said: “We know that to put more money in people’s pockets, we need a thriving private sector. That is what drives growth, creates jobs, lifts living standards.
“So the second part of our plan for prosperity is to unleash the power of business.” The £ 5billion package will be made through UK Export Finance ( UKEF), the Government’s export credit agency. The Budget boost will hike UKEF’S lending capacity from £ 3billion to £ 8billion, the biggest amount yet offered.
Mr Sunak believes the loan deals will encourage investment in UK firms to help the Government’s effort to spread prosperity and opportunity.
About £ 2billion of the fund will be offered for exports that encourage green growth. A further £ 1billion is earmarked for the defence industry.
A shake- up of entrepreneurs’ relief will limit the tax break available to those selling their businesses to £ 1million over a lifetime.
Mr Sunak ignored calls to abolish the relief completely, claiming the Government should not discourage genuine entrepreneurs who rely on it.
He added: “We need more risk taking and creativity in this country, not less.” Instead he announced he would reduce the lifetime limit from £ 10million to £ 1million.
The rules allow business owners of two years or over to pay less capital gains tax when they sell ( 10 per cent rather than 20 per cent), but this relief will now be capped at £ 1million for any one person.
The Chancellor said 80 per cent of small businesses would be unaffected, but the Treasury would save £ 6billion over the next five years.
He is giving most of that in savings straight back to small businesses.
Mr Sunak added: “The Research and Development Expenditure credit will be increased from 12 to 13 per cent, a tax cut worth £ 2,400 on a typical R& D claim.
“The Structures and Buildings Allowance will be increased from
two to three ee per cent, giviving an extra £ 100,000 of f relief if you’re investing ti i in a building worth £ 10million.
“And, to cut taxes on employment, I will deliver our promise to increase the Employment Allowance by a third to £ 4,000.
“That’s a tax cut this April for nea nearly half a million sma small businesses.” He added that the measures were “another step towards d the dynamic, low tax economy we want to see. We promised to cut taxes on business – we’re getting it done.” The plans are in line with Boris Johnson’s aims to help business. While campaigning to become PM last year Mr Johnson visited a number of firms, including the family- owned Nash’s Bakery in Bicester, Oxfordshire.
Les Cameron, pensions and tax expert at Prudential UK, said: “The changes to entrepreneurs’ relief will increase the amount of tax paid by businesses sold at a profit of over £ 1million.
“We should see advisers and accountants working to extract value from these businesses.”
Research and development is in line for a £ 22billion- a- year shot in the arm. More than £ 1billion will go to the animal health science facility in Weybridge, Surrey, while £ 800million will be available for a new “blue skies” research body based on a former US government agency.