With the Chancellor’s announcement of the Autumn Budget, many SMEs are wondering what tangible outcomes are on the table. Our CEO, Graham Davies, has worked in finance for over 14 years with companies big and small. He recently took part in a Q&A for B2B marketing geniuses Sopro, where he shared his insights on the Chancellor’s budget and what it really means for small businesses.
Read on for a summary of Graham’s tips!
I think it largely depends on the sector. Many of the changes were focused on the retail & leisure sectors. But generally I would say it is fairly neutral – not good or bad.
A major topic that went largely unmentioned is inflation. This is going to be an issue for business over the coming 12 months or so. I don’t feel that the Chancellor has really looked to address this yet.
For businesses that are operating in the tech/online space, or disruptive businesses – there really wasn’t any significant news. The focus seems to be on supporting the hardest hit sectors, such as hospitality – which makes sense.
The Chancellor announced an overhaul of the R&D tax credit scheme. This could be of specific interest to startups. The plan here is to make it slightly more generous, to encourage more investment in innovation in the UK.
The full details are not available yet, but more cost types will be included in the future R&D tax credit scheme. This should mean allowable expenses increased, and therefore higher payouts to startups in the tech space.
An increase in the normal CGT rate is probably unlikely in the short term. Having said that , an overhaul CGT started this year with the introduction of the Business Asset Disposal relief (previously entrepreneurs relief).
The level of relief could be reduced further in future, but this also counteracts the desire for the government to attract more investment in innovation to the UK.
My personal opinion is that some element of relief will remain in future – but probably not to the same level.
Borrowing at low interest rates in an inflationary environment can be really beneficial for companies – the idea being that you should be able to get a higher return on the money than the cost of the interest.
The advice I would give is that if a company is accessing funding (debt, for example) then make sure it is being invested based on a strong business case.
Who knows what will happen with central bank rates, but sitting on cash in an inflationary environment is not a good idea – especially with such low interest rates. Deploy the cash and make the most of higher consumer prices!
To find out more about how the Autumn Budget might affect your business, or for tips on how to take advantage of the new changes, why not schedule a free call with Graham?