Dear chancellor George Osborne, here’s what we as business owners would like to see from the Budget 2014.
With just over a week to go until the latest Budget speech, the rumour mills have cranked up and the business world has started to vocalise what they would like to see emerge.
Chancellor George Osborne is about to oversee his fifth Budget announcement, a chance for he and the government to lay down the foundations for what could be a last full year in power.
This government has been staunch in its pro-business approach, from reducing corporation tax, introducing start-up loans for maiden entrepreneurs and, much to most people’s annoyance, not chasing too hard when it comes to the large amounts of tax the likes of Google and Starbucks surely owe.
The 2013 Budget was a fairly positive one for entrepreneurs and business owners when Osborne delivered what he called a Budget for an ‘aspiring nation’. Included in his speech was a cut to employers’ national insurance bills (which is set to come into force at the end of this month), a doubling of the employer loan limit and tax relief for business owners looking to sell their company.
Corporation tax continued its downward trajectory, while the stamp duty reserve for shares traded on growth markets was removed in a surprise move.
To find out what the business community would like to see happen this year the GrowthBusiness team has been speaking with readers to gain some insight.
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Rob Symes, CEO and co-founder of software platform The Outside View and recruitment firm Campbell Black, says that as a serial entrepreneur he would like to see a reduction in red tape and unnecessary regulation that distracts people like him from innovation and revenue-generating actives. Red tape and regulation is a topic which regularly resurfaces throughout each year, with surveys indicating that businesses want it reduced, the government proclaiming that is what is being done and industry bodies mopping up the rest.
Tax, and how it affects the way companies go about business, is a much-discussed issue. Adam Bromley, managing director of PIQWIQ, believes it is essential to lighten the tax burden in what he describes as the ‘difficult early years’ of growth when money is tight and cash flow is a headache.
‘New businesses need an exemption from corporation tax for the first two years of trading,’ he adds.
Those initial months are the hardest of all, with many business owners working unpaid, living on credit cards and operating with funds borrowed from friends and family.’
Money going out on corporation tax is money which is not available for investment, expansion or satisfying cash flow, he says.
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‘It means we’ll have to borrow more to do it, but that’s fine because UK plc is generating a “profit” in our trade balance,’ he says.
Matt Jones, founder and media director of advertising agency Studio Tri and S3, comments, ‘Tax burdens are currently too high on smaller firms. Despite the small business rate relief scheme being extended for another year, it is not enough.
‘I would welcome an indefinite extension, which would ease the pressure on small businesses, foster economic recovery and help them thrive.’
Jones points to the fact that current corporation tax drops have only really helped the 80,000 larger businesses that inhabit the UK, not the 1.5 million-odd smaller firms.
Away from tax, recruitment is another big sticking point. From making it more affordable to make new hires to helping with the cost of apprentices, business owners throughout the company have a lot to say.
Raj Dhonota, former Apprentice contestant and founder of Igniva Solutions and Instant Translation, tells us, ‘I’m expecting (hoping is probably more accurate) the chancellor to introduce measures that will stop penalising small businesses for taking on graduate interns.
‘It does this by insisting on minimum wage payments which is huge hindrance to any micro or small business growing. These businesses can’t afford to take on graduates and, as a result, miss out on the valuable knowledge and enthusiasm these graduates could bring to the table.’
The solution, Dhonota says, would be to introduce a graduate intern introductory period of three to six months, for companies with three people or less, before minimum wage requirements kick in.
Bright Ideas Trust CEO Lisa Gagliani sees unemployment as an area Osborne needs to tackle. Creating and nurturing long-term career prospects, along with tax breaks, to encourage companies to hire and train those out of work is needed, she says.
‘I’d also like to see continued and increased support for the StartUp Loan scheme, which is making a huge impact for Bright Ideas Trust in terms of the number of young people we can support, mentor and fund,’ she adds.
‘Our own experience of trying to make use of government apprenticeship schemes has been tortuous, we have had a distinct lack of buy-in from local schools and the whole process was overly bureaucratic,’ Harris reveals.
‘So rather than more words, we would like to see the chancellor commit to shaking up these well-meaning initiatives so they actually deliver results for young people and small businesses alike.’
Business secretary Vince Cable has used big business to boost apprenticeships
Finance, and access to it, is another area where the government has laid out its hand but has divided opinion amongst many. Initiatives such as the Funding for Lending scheme, Regional Growth Fund, Project Merlin and the British business bank have promised much but often failed to deliver.
Darren Fell, founder and managing director of Crunch Accounting, says of the issue, ‘The obvious issues like late payment to small businesses and communication infrastructure need to be addressed, however I believe the government should take more drastic action to help those starting their own business.
‘Access to capital is the biggest problem for entrepreneurs – HMRC could offer, for example, a rebate of three months of PAYE tax contributions from their full-time employment to those who start their own business. This would get the cash to start-ups when they need it most – right at the start of their business.’
Spring Partnerships director Stephen Archer also believes that more cash is necessary for small businesses and start-ups. He points to the government’s National Loan Guarantee (NLG) scheme as an example of promising, but not finished initiative.
‘The NLG comes into effect this spring but is limited to loans of more than £20,000. This could be changed to a limit of more than £10,000 to help smaller businesses.
‘The smaller the business the more people can be employed and more businesses will be given sustainability.’
Away from the traditional sticking points, there are a number of different and interesting topics which have arisen. With the UK now in the Year of Code, Progress Software technical product manager Gary Calcott is calling for the Budget speech to ensure that children of all ages are given hands on access to programming technology that focuses primarily on ‘ease of use’.
‘The chancellor must ensure that resources are dedicated to making tools available for children to experiment and make the fundamentals of their computing education a fun, informal and enjoyable experience.’
The Year of Code was launched in February and sees coding enter the curriculum
Also on the subject of children, and equipping our future workforce, Karisma Kidz founder Erika Brodnock says she’d like to see a lot more invested into the emotional and social learning and wellbeing of kids.
‘This is a subject often overlooked by the government causing detriment to the generations now in and post school,’ she says.
‘An acknowledgement that the “softer” skills and outcomes are just as important as the traditional ones is integral to our childrens’ development, sit has now been proven that by improving the provision of softer skills training we can ensure attainment levels are positively affected too.’
The entrepreneurial world is an incredibly opinionated one, and there is no way of pleasing the entire growth company community when Osborne stands up to address the nation on 19 March.
However, in an age when the fortunes of SMEs have never been more relevant, there is a long list of suggestions for him.