Calls for small business focus during Philip Hammond’s Autumn Statement
Ahead of the chancellor’s first Autumn Statement address, KPMG has urged Philip Hammond to “keep it simple” and support the nation’s biggest economic drivers.
The Autumn Statement, to be delivered on 23 November after prime minister’s questions, will be the first major indication of how Theresa May’s new cabinet will support small and medium-sized businesses in the UK.
KPMG believes an emphasis on exporting and funding support is important, along with incentives to encourage and support small business owners in their startup and scale-up efforts.
Bivek Sharma, head of the firm’s Small Business Accounting division, said that it will be important for the Autumn Statement to include more than “big ticket projects” in the infrastructure and construction spaces.
“It is also important that the government takes the responsibility of dividing up the work fairly. Steps need to be taken to ensure small businesses have just as much access to work in infrastructure projects as large corporates, for example by ring fencing a proportion of construction work for small businesses,” he added.
Meanwhile, KPMG’s Enterprise team believes it would be helpful to small companies if the chancellor included in his Autumn Statement address a reversal to the dividend tax changes that were brought in by his predecessor in April.
Back then, Osborne announced that the current system of treating dividends as “tax paid” in the hands of shareholders will be scrapped to make way for the introduction of a £5,000 tax-free limit for dividend income and new rates of tax on dividends valued above that.
Income from dividends in excess of £5,000 after a taxpayer uses up any remaining personal allowance is taxed at 7.5 per cent for basic rate taxpayers, 32.5 per cent for higher rate taxpayers and 38.1 per cent for those paying the highest rate of income tax who pay additional rates.
KPMG believes the move to require small firms file accounts digitally every quarter, alongside a final trading statement, is “hugely onerous and expensive”. Furthermore, anything other than a continuing hold to Business Rate relief could put “hundreds” of small businesses out of business in a “very short amount of time”.
On the subject of funding, Sharma commented: “The sheer number of schemes and how to access them is a massive hurdle for most small businesses. Supporting this idea of simplifying the landscape for small businesses it would be great to see the chancellor bring everything together under one programme.
“Encompassing the British Business Bank, Enterprise Investment Scheme, Seed Enterprise Investment Scheme and venture capital trusts in one place will not just help more startups access the right finance for them, but importantly, it will be crucial in getting startup businesses to scale up to medium size enterprises.”
Business Advice will be providing comprehensive coverage of the Autumn Statement on Wednesday 23 November, covering all of the most important developments for small business owners and managers.