Stuart Noakes, Tax Partner at Carpenter Box, welcomes the moves announced in the Autumn Statement to support 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.”

The extension to the Enterprise Investment Scheme will be further appreciated by business start ups, 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.”

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

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

To contact Stuart, link here.