Access to Credit

The Government is to allow access to £20bn of cheaper funding banks providing the benefit is passed to smaller businesses, which is still subject to State Aid approval.  It is expected that this could lead to a reduction in the cost of a business loan of up to one percentage point.

 

£1bn will be made available through a business finance partnership to invest directly in SMEs and mid-sized businesses in the UK through loan funds.

 

The Government has committed to look at other measures to increase the supply of credit to SMEs and mid-sized businesses.

 

Seed Enterprise Investment Scheme

There was some good news for start-ups in the form of the introduction of a new Seed Enterprise Investment Scheme (SEIS). In companies with assets of less than £200k, investors can claim 50% income tax relief on investments of up to £100k. However, the maximum which can be raised by the investee company as part of the scheme is limited to £150,000. On any

assets disposed of in 2012-2013 where the funds are reinvested in SEIS companies, investors will benefit from a capital gains tax exemption.

 

Some simplifications will also be made to the existing EIS relief rules.

 

Small Business Rates

The current small business rate relief holiday is to be extended for a further six months from 1 October 2012. In addition,

60% of the increase in 2012-2013 business rate bills as a result of RPI uprating may be paid over the following two years. Devolved administrations will be provided with funds under the Barnett formula to facilitate similar action if desired.

 

Enterprise Zones

In certain Enterprise Zones, 100% capital allowances will be available, with an extension to other Enterprise Zones being announced.

 

Innovation

The Government has announced it will invest as follows :

 

£75m in supporting technology based SMEs in the development of new products and services.

£200m will be invested in science.

£25m for large scale technology demonstrators.

 

Employment

The Government aims to introduce a package of measures for small businesses to ease the burden of employment

regulatio n, which includes:

 

The introduction of a quicker and cheaper alternative to a tribunal hearing.  A call for evidence on the impact of reducing the collective redundancy process for 100 or more staff from 90 days to 60, 45 or 30 days. A call for evidence on the introduction of compensated no-fault dismissal for businesses with fewer than 10 employees and how a more simple dismissal process could be introduced.

 

Benefits and Tax Credits

State Pensions

The state pension age will be increased to 67 between April 2026 and April 2028. Future increases in the state pension age

will be based on demographic evidence.

 

The full basic state pension will rise by £5.30 to £107.45 a week in April 2012. The full couple rate for those whose entitlement is based on their spouse’s or civil partner’s pension will rise £8.50 to £171.85 a week.

 

The standard minimum income guarantee in Pension Credit will increase by 3.9% in April 2012 to £142.70 a week for single pensioners and £217.90 a week for pensioner couples.

 

The threshold for Savings Credit will be raised in April 2012 to £111.10 for single pensioners and to £177.20 for pensioner couples.

 

Transport Tax and Duties

Fuel Duty

The 3.02p per litre (ppl) fuel duty increase that was due to take effect on 1 January 2012 will be deferred to 1 August 2012,

and the inflation increase that was planned for 1 August 2012 (currently expected to be worth 1.92ppl) will be cancelled. So there will only be one RPI increase next year. The details of the design of the fair fuel stabiliser will be published in the 2012 Budget.

 

Employment and Regulation

Employment Law

The qualifying period for unfair dismissal claims will be increased from one year to two years from April 2012. The government will also introduce fees for individuals who want to bring cases to employment tribunals and will consult on their level.