A key priority for me is to help local businesses grow, and to support the employers who are spearheading efforts to tackle unemployment.
The economy is recovering but the further growth that we need will come from small and medium sized businesses flourishing. I am working with the Government is working hard to ensure that the right conditions and support are in place to enable these businesses to prosper.
THIS GOVERNMENT’S HEADLINE ACHIEVEMENTS IN SUPPORTING BUSINESS
Cutting both the main and small profit rates of corporation tax to the lowest in the G7. The small profits rate (profits of £300,000 or less) is 20 per cent. Corporation tax has been cut by 2 per cent to 21 per cent. This has fallen from 28 per cent in 2010 and will fall further to 20 per cent in April 2015, unifying the small profits rate and main rate, making it the lowest corporation tax rate in the G7.
Cutting businesses National Insurance Contributions (NIC) by £2,000. 450,000 businesses will be taken out of paying employer NIC altogether.
Taxes on business investment have been virtually abolished for most businesses as the annual investment allowance has doubled to £500,000.
The Business Bank has helped over 35,000 smaller businesses secure the capital they need to invest and grow and has facilitated £2.3 billion of new lending and continues to help businesses access finance.
Red tape has been cut and the net burden of regulation on business has fallen by £2.2 billion since 2011. Thousands of pointless regulations are being ripped out to save businesses a further £1 billion in annual savings. Importantly, the government is on track to be the first in modern history to leave office with fewer regulations than when it arrived.
The Government is working hard to boost exports. UK Trade & Investment is helping 50,000 companies, more than double the number it helped in 2010. UK Export Finance, has been doubled to £3 billion and the interest on that lending is being cut by a third to provide competitive financing that helps UK firms win contracts and expand overseas.
Local businesses will benefit from a cap on business rate rises and an extension of rate relief until April 2015. 385,000 small firms will pay no business rates at all because of the doubling of rate relief.
Making it easier to employ young people by abolishing the jobs tax on under 21s from April 2015.
Improving employment law by doubling the qualification period for unfair dismissal and introducing employment tribunal fees.
Over two million new apprenticeships since 2010 and new apprenticeships are based on standards designed by employers so they can play a more effective role in meeting the skills demands of our economy.
There are 760,000 more private sector businesses.
Businesses have created over 2 million new jobs. This is 5 jobs in the private sector for everyone 1 lost in the public sector over the past four years.
ACTION TAKEN TO HELP BUSINESSES
CUTTING TAXES FOR BUSINESS
Corporation tax has been cut by 2 per cent to 21 per cent. This has fallen from 28 per cent in 2010 and will fall further to 20 per cent in April 2015, making it the lowest corporation tax rate in the G7.
The annual investment allowance has now been doubled to £500,000, and has been extended by a further year to December 2015. This means 99.8 per cent of businesses could pay no tax on investment.
MAKING THE TAX SYSTEM SIMPLER
At the Budget 2015 the Chancellor announced he would abolish the annual tax return. This means millions of people will have their information automatically uploaded into new digital tax accounts. Those with the most complex tax affairs will be able to manage their account on-line.
Businesses will feel they are paying a simple, single business tax with most having their information automatically received. The Chancellor also announced that Class 2 National Insurances contributions for the self-employed will be abolished.
The Chancellor also announced at the budget that the Government will implement a package of measures to improve the accessibility of R&D tax credit for smaller businesses.
The annual net burden of regulation on business has fallen by £2.2 billion since January 2011.
The Red Tape Challenge has identified over 3,200 regulations to be scrapped or improved bringing over £1 billion in annual savings to business. It has already implemented many reforms on: the micro-management of no smoking signs; more flexibility in audit requirement for small businesses; reducing thousands of local housing standards to five national standards saving house builders and councils around £100 million; 84 per cent of health and safety regulations is being improved or overhauled.
The last Labour Government presided over the equivalent of six new working regulations every working day, or 1,500 a year.
Cutting red tape from the EU
The Government is working with partners across Europe to reduce the burden of EU legislation on business. Priorities include:
Persuading the Commission to publish an annual statement of the net cost of EU legislation, to help business see what burden of regulation stems from the EU; and making sure that business have an opportunity to influence EU proposals at an earlier stage.
Tough new rules to stop ‘gold-plating’ of EU legislation have prevented Whitehall departments from adding additional red tape to EU legislation that is incorporated into UK law, unless this is clearly in the UK interest.
The Government is working with partners in the EU to cut the cost of European legislation through the Business Taskforce. Many of the Taskforce’s recommendations for reform have already been implemented, including unnecessary bureaucracy around clinical trials, non-financial reporting and environmental impact assessments.
IMPROVING ACCESS TO FINANCE
The British Business Bank is launching a pilot ‘Help to Grow’ programme to increase the supply of growth loans to firms that need between £500,000 and £2 million to achieve their potential.
The British Business Bank is increasing the supply of capital to small businesses throughout the UK. Its programmes are supporting £3 billion of finance for businesses.
The Enterprise Finance Guarantee Scheme which helps small businesses that lack security or a track record will have further funding to facilitate up to £500 million of new lending in 2015-16.
The Funding for Lending scheme will be extended by another year until January 2016. Lending banks will be able to draw £5 of funding for every £1 of lending and the scheme will be exclusively focused on small businesses.
To help small businesses access finance from alternative lenders new measures will force banks to automatically pass on customers they turned down for credit to alternative lenders, also helping bring competition to the market.
The Start-up Loans Scheme has awarded over 27,000 loans and lent over £140 million to entrepreneurs wanting to set up their own business.
IMPROVING EMPLOYMENT LAW
The Government has doubled the qualifying period for unfair dismissal to two years and introduced employment tribunal fees to relieve the £84 million burden on the taxpayer and to deter weak and vexatious claims.
The UK’s direct lending programme of export finance has doubled to £3 billion and the interest rates it charges on that lending will be cut by a third.
UK Export Finance has launched its £5 billion Export Refinancing Facility. This will enable UK based exporters to offer competitive long-term financing to overseas buyers who require loans in excess of £50 million to purchase UK capital goods and services.
UKTI has doubled the number of businesses it helps since 2010 to 50,000. From 24,500 in 2010-11.
Help first time exporters. A £20 million package of support for first time exporters, his includes:
An increase in UKTI’s regional network of International Trade Advisors to help an extra 6,000 companies per year
Tailored support to help 5,000 companies per year access new markets through the internet
Funding for a global events programme to double attendance at international exhibitions by small businesses with UKTI support to 60,000.
The Government will increase UK Trade & Investment’s resources to double the support for British exporters to China.
BUSINESS RATES REVIEW
A wide-ranging review of national business rates has been launched and is set to report back by Budget 2016. The review will examine the structure of the current system which is paid annually on 1.8 million properties in England and look at how businesses use property, what the UK can learn from other countries about local business taxes, and how the system can be modernised so it better reflects changes in the value of property.
ACHIEVEMENTS FOR SMALL BUSINESSES
Small businesses employ 12 million people, with a combined turnover of £1.2 trillion, accounting for 33 per cent of turnover in the private sector.
Small and medium-sized businesses account for more than half (60 per cent) of employment and almost half (47 per cent) of turnover.
Small businesses alone (those with fewer than 50 employees) account for 48 per cent of private sector employment and 33 per cent of private sector turnover.
Of the 5.2 million private sector businesses in the UK, the majority fall entirely in the small business category as businesses employing fewer than 50 people make up 99.3 per cent of the total number.
The small profits rate (profits of £300,000 or less) is 20 per cent. Corporation tax has been cut by 2 per cent to 21 per cent. This has fallen from 28 per cent in 2010 and will fall further to 20 per cent in April 2015, unifying the small profits rate and main rate, making it the lowest corporation tax rate in the G7.
The R&D tax credit for small businesses will increase to 230 per cent in April 2015.
KEY ISSUES FOR SMALL BUSINESSES/ REMAINING CHALLENGES
Action is being taken to streamline and remove barriers to help small businesses gain fair access to the £230 billion public procurement market. Measures will make it easier for them to raise concerns about public procurement practices and ensure they are small business-friendly.
HELP TAKING ON STAFF
The Employment Allowance gives every business and charity a £2,000 cash-back on jobs by reducing their employer National Insurance Contributions bill each year. Over 90 per cent of the benefit of this allowance will go to small businesses with fewer than 50 employees.
Employer National Insurance will be abolished for under-21 year olds on earnings under £813 per week (£42,285 per year) from April 2015. This will significantly reduce the cost of employing young people by making it over £500 cheaper to employ an under-21 year old earning £12,000 and over £1,000 cheaper to employ an under-21 year old earning £16,000.
From 2016 employer National Insurance Contributions for apprentices aged under 25 will be abolished on earnings up to the upper earning limit. This means employers of around half a million apprentices will be exempt from paying employer national insurance.
From April 2016 large and listed companies will have to publish their payment practices and performance.
Changes to the Prompt Payment Code will promote 30-day terms as standards with a 60-day maximum limit. Unless signatories can prove exceptional circumstances for longer terms they will be removed from the Code by the new Code Compliance Board.
The Government is leading by example – all government departments have included in their contracts a requirement that main contractors pay their suppliers within 30 days.
I work closely with Jobcentre Plus Devon and Cornwall, work programme providers, local employers and jobseekers to boost the employment chances of people in my constituency. I have also joined forces with the National Apprenticeship Service and in Spring-Summer 2012 I was delighted to successfully complete a challenge to help local employers create 100 new apprenticeships in 100 days.
It is our small and medium businesses that are leading Britain out of the economic crisis, and I am doing everything I can to support this. I am working with UK Trade and Investment to encourage Cornish businesses to export to new overseas markets and in 2012 opened what I hope is the first of many Cornish export workshops. Further information can be found here.
UK Trade and Investment is just one the organisations supporting businesses; however information on how to access such support can be hard to find. In recognition of this, Cornwall and the Isles of Scilly Local Enterprise Partnership (LEP) have prepared an online directory which lists organisations that can help businesses to grow and flourish.
Whether you need help in finding the right source of finance, finding new networking opportunities or trying to recruit new members of staff, there are plenty of companies, networks and organisations that can help you. The Business Pulse guide provides details for each organisation which can be found under the sections such as - Leadership, Planning and Advice - Funding and Managing Money - Skills and Training - Marketing and Communications - Staff and Recruitment.
There is also a new 'Open to Export' service which helps to provide all the information that small and medium sized firms need to export their goods and services overseas. With hibu (formerly Yell Group) working together with UK Trade and Investment (UKTI), Open to Export provides a free and simple guide to help businesses to find new customers, tap into new markets and overcome any barriers that stand in the way of them expanding their trade abroad.
Open to Export can be found through their website.
I am also very pleased to see that Cornwall is leading the way in innovation with the robotics firm Engineered Arts being awarded a NASA contract worth almost £80,000.
The company, based in Penryn, will be responsible for designing and manufacturing robots which will welcome visitors to the Kennedy Space Centre. This now means that the Cornish firm is actively competing with other robotics companies across the world such as Honda and Boston Dynamics.
I am proud to support the Small Business Campaign, headed by Karren Brady. More information can be found here.
Unlocking Potential helps people develop and businesses grow in three ways: developing business, finding talent and making connections. Find out more through their website via the link below:
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