Reactions and opinions on Rishi Sunak's autumn budget of this year are mixed and the jury is still out on exactly how effective it will be. Regardless, it did contain some good news for small business owners, start-ups and entrepreneurs.
Perhaps the biggest piece of good news for many was what the budget did not contain - the rumoured equalising of capital gain tax rates and income tax rates. This means a rumoured tax rise that would have significantly increased many tax bills did not materialise.
In addition, Rishi's budget contained a number of different policy announcements that should benefit small and growing companies and people who want to get ideas off the ground.
Firstly, the increased £1,000,000 level of Annual Investment Allowance from £200,000 has been extended to 1 April 2023, representing a 15 month extension from the current deadline. This is going to be welcomed by entrepreneurs getting smaller companies off of the ground, especially those that need to invest in plant and machinery to assist with supply distribution at a time where this has been challenging for many companies.
When it comes to actual investment, the Chancellor is increasing the UK government's spending on R&D from 0.7% of GDP to 1.1% of GDP with the amount spent being £20 billion per year by the end of the Parliament. This compares favourably with the OECD average of 0.7%. Innovative businesses will likely be welcoming an increased chance to get funding.
Moreover, we saw confirmed support for the Kickstart scheme, by extending this to March 2022, and the Help to Grow management and digital schemes, by providing more funding. This comes alongside £150 million going to the British Business Bank's Regional Angels Programme which will help ensure that entrepreneurs based outside of the capital will have another avenue of funding to get their companies off the ground.
We are therefore seeing a commitment by the government to ensure that funding is available for entrepreneurial business, particularly outside of London and in R&D.
As well as funding, the plan is also to introduce what the Chancellor described as a "modernised R&D tax credits regime" from April 2023. While the exact nature of these is still to be more fully defined, we know a large part of this will involve introducing territoriality restrictions on R&D tax reliefs. This, may help drive incentives to invest in R&D in the UK and therefore provide more opportunities for innovative businesses and start-ups here in the UK.
R&D tax reliefs are also going to now include cloud computing and data costs. Given that the amount of data we use appears to be only increasing and tech is increasingly central to many companies, this may well prove to be another useful helping hand for companies getting on their feet. Dom Hallas, executive director at the Coalition for a Digital Economy, said this brought, "a critical programme up to date for 21st century R&D".
Finally, the new 'Scale-Up Visa', is likely to smooth concerns that, following Brexit, it is much harder for growing business to bring in the individuals they need to get their company to grow.
Entrepreneurs, start-ups and innovators are therefore likely to be welcoming much of the content of the Autumn Budget 2021 and it should provide a cautious degree of optimism for them in the near future. It however remains to be seen if it does enough to deal with the issues facing those companies and how all the proposals come to be implemented.
"We need to do what the people of this country have always done... invent, discover, and create the ideas and technologies that will change the world." - Rishi Sunak