Robust tax roadmap is essential for the UK’s small business
Ahead of the Budget, small business champion, Purbeck Insurance Services, calls for tax clarity to help provide surety to small businesses over the medium term, to reduce barriers to investment and provide the confidence needed to grow:
Todd Davison, MD of Purbeck Insurance Services says: “As the long-awaited budget draws near, uncertainty continues to damage confidence amongst small businesses. This is demonstrated by a 56,000 drop in the number of private sector businesses in the UK now, compared to 2023. Decisive action is needed to provide clarity to small business owners, who are working hard to keep their businesses going, shouldering the financial burden in many cases, through Personal Guarantee backed business loans.
Unlocking alternative investment
“We welcome the news from the British Business Bank of the proposed British Growth Partnership. At Purbeck we witness most applications for personal guarantee insurance coming from small businesses that have secured funds from alternative lenders, so creating an environment whereby more alternative investment can be unlocked to support SMEs is a really positive move.
Blanket increase in CGT could detract investors
“Capital Gains Tax (CGT), however, is going to play an important role in the budget and shaping the future of small businesses. A blanket increase in CGT could detract investors who take significant risks with their capital, from backing small, growing companies. After all, if they are taxed more highly on the proceeds, there’s little reason to risk their cash.
Permanent should mean permanent when it comes to full expensing
“Too many question marks remain over tax and finance for SMEs. The last Government announced that full expensing would be made permanent, meaning companies can offset the full cost of any new IT equipment, plant and machinery against tax. Recent research by leading think tanks, however, reveals that the impact on the economy will be dwarfed by the money lost to UK taxpayersii. Understandably, confidence in the permanency of full expensing has been knocked. We want Labour to reiterate that permanent means permanent when it comes to full expensing.
Capping corporation tax
“SMEs would also like surety on the Labour government’s election promise of capping corporation tax at 25%. This would go a long way towards providing certainty and encouraging business investment.
Better education needed on loan facilities
“As well as reassurance over tax, we would like to see Government work more closely with the SME community to improve awareness regarding how different loan facilities work. A relatively small investment from the Government in greatly enhanced education surrounding the myriad of SME finance options, could work wonders in helping small businesses understand that barriers to investment can be easily overcome.”