What does the Autumn Statement mean for business buyers?

The Chancellor's Autumn Statement brought some seasonal warmth to those considering making a small business acquisition, with tax, infrastructure and funding announcements made that are all likely to benefit small business buyers and owners.

One of the key statements made was that the Small Business Rate Relief scheme will be extended for a further 12 months from 1 April 2013, allowing more than half a million small businesses to benefit, with 350,000 not paying any business rates until April 2014. That announcement compounded the benefit that small business owners will also experience from the confirmation that the headline rate of corporation tax will be cut to 21 per cent in April. The corporation tax was just one of several headline amendments to stem from an Autumn Statement that has left small businesses in little doubt that they are being considered at the front line of the national economic recovery.

In his 5 December announcement, the Chancellor of the Exchequer, George Osborne, also shed light on a number of initiatives that will see key arterial routes – both road and rail – improved, regional growth funds strengthened and tax amendments made that will improve the economic situation for the nation’s small business entrepreneurs.

Business groups, including the Federation of Small Businesses (FSB), have said that the new Business Bank will allow companies to bring forward major investment decisions, such as the purchase of other distressed businesses. The funding of the Business Bank was a key point of the statement, with it set to receive an investment injection of £1 billion, making purchases and start-up costs much easier to cover.

According to the statement, “[The Business Bank] will deploy £1 billion of additional capital to address structural gaps in the supply of finance to SMEs and stimulate the provision of long-term capital, including by leveraging in substantial private sector 40 Autumn Statement 2012 finance.”

The bank will also serve to bring together, review and rationalise existing business finance schemes being run by the government in order to increase access to and awareness of these interventions.

Furthermore, some £350 million will be pumped into the Regional Growth Fund (RGF), providing increased funding opportunities for ‘pinch-point’ areas that are finding economic recovery difficult and may have particularly high concentrations of distressed businesses. The additional funding to the RGF brings its total to £2.6 billion, all aimed at generating new business and ensuring that the economic recovery is spread throughout the country. In order to make sure the greatest number of private sector jobs possible are generated, the Government will be examining the successes from the previous rounds of RGF allocations to determine how the new round will be distributed and how companies can apply for it.

But will regional business funding really be of benefit if the infrastructure is not sufficient to support it? Well, that’s where some initiatives mentioned in the statement will strike. Osborne announced major investment plans to improve some of the UK’s most vital business routes, including the A1 and the M25, giving small business owners and entrepreneurs in London easier access to regional opportunities and regional business owners access to the network of industries in the capital.

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