MHA MacIntyre Hudson welcomes moves to stimulate growth amongst UK SMEs

Katharine Arthur, Tax Partner, welcomes the moves announced in today’s Autumn Statement to support the UK SMEs: “A reduction in borrowing costs on loans of up to £40bn, underwritten by the Government, is a positive move as SMEs brace themselves for yet another tough year ahead.  It’s worth noting that this may not in itself increase the number of loans to small and medium-sized businesses.  However, because the money will be allocated to the banks in proportion to their lending, it should encourage more lending in the sector. This is a move desperately required within the sector if we’re to see meaningful growth.”

Arthur continues that the extension to the Enterprise Investment Scheme will be further appreciated by business start up, as the Government tries to garner more support, “50% income tax relief for investment of up to £100,000, whatever the rate at which the investor pays Income Tax, in start ups is a positive move for those looking to drive business growth and will be welcomed by our clients.”

We also welcome the plan to simplify EIS by relaxing the connected person rules and the definition of shares that qualify for relief.  EIS is a valuable and well targeted relief, but the rules can mean that SMEs inadvertently fall foul of the anti-avoidance.  We welcome simplification which will get greater certainty to businesses and their investors.

The announcement of the above the line R&D tax credit is welcome for larger companies, encouraging greater R&D activity and spend.  More specifically welcome is the assurance that the proposed changes will not have a negative impact on SMEs.

For further information on the measures announced, visit our Autumn Statement webpage>>