You are here: Home - News -

Small firms to get £300m business rate relief and investment boost from Osborne

  • 29/11/2011
  • 0
Small firms to get £300m business rate relief and investment boost from Osborne
Small businesses are expected to receive a £300m package of tax breaks in this afternoon’s autumn statement, intended to stimulate investment and ease the lack of credit available to small firms.

Chancellor George Osborne will announce four measures, taking in business rate relief, enterprise investment, small firm loans and capital gains tax, that one tax expert believes the government would not consider unless it believed they would truly boost growth.

It is predicted the one year business rates holiday for small firms, due to end in October 2012, will be extended by a further six months, costing the Treasury around £210m.

Osborne believes the move will help 500,000 businesses across the UK, with 330,000 firms paying no business rates in 2012/13.

In addition, the government will announce a “credit easing” scheme to release up to £40bn of loans to small firms, with the Treasury underwriting banks borrowing, so they can offer cheaper loans to smaller firms with a turnover of less than £50m.

Loans of £20bn will be involved, but Osborne has suggested this could be doubled.

Enterprise investment will also be given a boost from April next year, with the government offering 50% income tax relief to “business angels” on the first £100,000 they invest in a new company. New firms will be eligible for up to £150,000 investment in total.

The scheme, expected to cost £50m over three years, will also offer investors a capital gains tax holiday for the first year to encourage those sitting on profits from other investments to put the cash towards new start ups.

George Bull, senior tax partner at Baker Tilly, said: “These tax measures ought to help. We don’t have excess tax revenues to give away, so the Treasury really has to be convinced that they will be helpful.

“The business rate holiday is a thoroughly good idea that those that qualify will be very grateful for. One must not underestimate the huge pressures businesses, particularly small firms, are under.”

Bull added: “I have a great belief in angel equity. It is at a relatively small scale that banks don’t have the processes to deal with without killing firms with paper work. Private investment could be very important for all sorts of business and it will be a real feature of the landscape for the next five years.”

However, Bull warned that returning confidence is vital to recovery: “We are undoubtedly in the worst crisis we’ve ever seen, but politicians need to stop the perpetual hand ringing and make a concerted effort to boost confidence in the country.

“Businesses with confident management will recover well from a crisis and I believe it’s the same for the country.”

Osborne will deliver his autumn statement from 12.30pm today. Watch it live here.


There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
L&G: Extend Stamp Duty relief to second-time buyers

To give the UK housing market the boost it needs, Chancellor George Osborne must cut or extend Stamp Duty relief...