For some time we've been stating the obvious, that the UK's SMEs are crucial to our nation's economic recovery. We are pleased to see that, at last, it seems that the Government agrees.
Only by reducing the barriers businesses currently face can the country be driven forward and away from the prolonged downturn, and George Osborne's Budget would suggest the Government's beginning to consider the lifeblood of our economy.
Last October, within our latest SME Trends Index we asked business owners what action they wanted to see the government take that would most assist their businesses. Widespread tax cuts were high on their agenda, with a reduction in Corporation Tax, VAT and Income Tax highest on the list for 21%, 19% and 8% respectively - research that was used in a government departmental meeting.
It's encouraging to see that two of the three elements were covered within the latest Budget. Firstly, Corporation Tax was reduced by twice what was expected to 24% from April 2012, with the government committed to slashing it to 22% in 2014 and hinting their oveall objective is to eventually bring it down to 20%.
Second were the reforms to Income Tax. It was announced the personal allowance will be increased in each of the next two tax years to take it closer to the coveted £10,000, whilst the 50p tax rate on the country's highest earners will be cut to 45p next year.
Mr Osborne also vowed to radically reduce the administrative burden on smaller firms through various measures, including the potential merging of Income Tax with National Insurance Contributions. A consultation report on the matter is due to be published in April.
Of course, access to finance remains another critical factor at present, so it's positive to see the launch of the National Loan Guarantee Scheme alongside the extension of the Business Finance Partnership and Enterprise Finance Guarantee. Yet there's unfortunately no guarantee this will increase the availability of credit to businesses who have seen their funding applications rejected in recent times. Whilst loans will be cheaper, it's too early to say whether this will do anything to assist lending within specified frameworks, which form the basis of traditional bank facilities such as overdrafts.
For this reason, we encourage businesses to explore more available and flexible cash flow solutions to assist their business' growth. As these figures show, invoice finance is one such facility that is helping more and more companies like yours to access the cash required to invest in growth.
To find out more, please complete the form on the right and our team will be in touch to discuss how we can assist. Alternatively, you can get an instant quote to gain insight into how much you could release against your sales ledger.