Autumn Statement 2023: 10 small business measures Enterprise Nation wants to see

Ahead of the government's Autumn Statement on 22 November, Enterprise Nation submitted its proposals to the Treasury.

Join an online panel of business owners and experts for instant reaction to the Autumn Statement from 12.30pm on 22 November. You can also share your views

Enterprise Nation's asks centre around our key policy priorities, closely aligned with the pressing concerns of our 100,000+ small business members. These priorities include:

1. Markets access: Enhancing small business access to markets for growth.

2. Finance access: Ensuring accessible capital options for small businesses.

3. Talent access: Supporting talent attraction and retention.

4. Tech adoption: Promoting tech adoption for productivity.

5. Space access: Advocating for affordable workspaces.
   

Enterprise Nation’s full submission can be found here and a summary is below.

Access to markets

Deliver the government’s ambition to spend 25% of its procurement budget with small firms

Our report Access all areas: Government found that despite the ambition to spend 25% of its procurement budget directly with small firms, the Government has only so far managed to spend 10%. To facilitate this, the government should consider connecting its tier one suppliers to Small and Medium-sized Enterprise sub-contractors.

Improve the accessibility of the information available to SMEs interested in exporting

Enterprise Nation’s report, Access all areas: Markets, highlighted that entrepreneurs do not know what action is required to, for example, comply with regulations or taxation in relation to international trade. Some small businesses we spoke to were interested in the idea of exporting, but didn’t know how to go about starting that journey.

The government should consult closely with entrepreneurs and business organisations to streamline the services it offers to help small businesses navigate to the right places to begin exporting.

Trial an Export Tax Credit or Export Vouchers to incentivise exporting among SMEs

To help incentivise small businesses to export, the government should consider tax incentives, in the form of an Export Tax Credit or ‘Export Voucher’. This would allow businesses to claim a credit on any money it spends in pursuit of exporting activities.

Exactly how the Export Tax Credit should work would need to be consulted on, but modelling it on Research and Development Tax Credits would be a sensible place to start. Businesses are already familiar with how this works, and it has proven a successful intervention to date.

An alternative form of support could be to trial Export Vouchers, to subsidise the costs of firms that are looking to export for the first time. Voucher-style schemes are a common intervention, and also have recent precedent with regards to helping businesses that trade.

Access to finance

Build on recent progress to stamp out late payments

The government’s recently announced new measures were welcomed by small businesses across the country, who will be looking forward to the publication of the Prompt Payment and Cash Flow Review to see the detail. In addition to the announced measures to tackle late payments, the UK government should consider recent measures from the Dutch government to mandate 30-day terms to larger firms procuring from smaller ones.

Scrap the sunset clause for key investment schemes

Enterprise Nation’s report, Access all areas: Finance, argued that Scrapping the sunset clause for the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs) and removing the need for Advanced Assurance for Seed Enterprise Investment Scheme (SEIS) will help entrepreneurs scale and innovate.

Unlocking pension funds to channel more investment to growth companies and infrastructure will help maintain the UK’s position as a global business centre.

Access to people

Improve support for older people who want to get back into work or self-employment

Enterprise Nation’s report, Access all areas: Older workers, found 67% of entrepreneurs over 50 say now is a good time to start a business. While the government offers support in various forms, the Learning and Work Institute found that the support currently engages only one in 10 out-of-work disabled people and 50- to 64-year-olds each year.

The government should promote its Access to Work initiative to help people with physical or mental health conditions to get or stay in work. The government should also make Work Adjustment Passports available to all participants, as well as modernising the system so that people can submit documentation online.

Access to technology

Co-fund the delivery of the Tech Hub

The Enterprise Nation Tech Hub is designed to deliver on the vision of Help to Grow: Digital, which closed for applications in February 2023.

Enterprise Nation built the Tech Hub with funding from partners Cisco, Google, Sage and Vodafone. It will give thousands of small businesses access to digital tools and training, whilst tracking productivity improvements.

Enterprise Nation is now in discussions with Growth Hubs on delivering this as a public/private sector partnership.

Access to space

Introduce a levy on commercial-to-residential transfers to discourage tax motivated shifts from commercial to residential property

There is an unintended tax advantage in favour of residential development. Because Council Tax is significantly lower than business rates, there is a distorting incentive to convert commercial to residential property. To discourage tax motivated shifts from commercial to residential property, a new levy on commercial-to-residential transfers should be introduced.

Scrap and replace the business rates system with a tax on the underlying land values, not productive investment

Enterprise Nation’s report, Access all areas: Space, argued that the current business rates system is not fit for purpose. While cutting business rates can offer short-term relief, evidence suggests this is effectively a tax cut for landlords, as rents rise to offset any cuts.

Therefore, a more efficient system would see the business rates system replaced with a tax on the underlying land values, not productive investment.

If the business rates system is retained, freeze them until the Bank of England’s inflation target is met

Business rates can represent a significant financial burden for small businesses as these taxes are based on property valuations, which can be high, especially in prime locations.

Considering current high inflation levels and increasing consumer costs, increasing the business rate multiplier would significantly add to the already-high business tax burden, which may have to be passed on to consumers, hitting small business profit margins and hampering their growth.

Enterprise Nation's Autumn Statement 2023 panel

Join an online panel of business owners and experts for instant reaction to the Autumn Statement from 12.30pm on 22 November. You can also share your views.