 Solid package of measures for small businesses but funding troubles will delay the recovery
23 March 2011: PKF Accountants & business advisers welcomes the support measures for SMEs announced in today’s Budget, but warns that without access to cash there is not enough to properly kick start the economy.
Lisa Macpherson, national tax director at PKF, comments: “The increase in income tax relief on the Enterprise Investment Scheme (EIS) from 20% to 30% next month and other improvements to the scheme could prove to be significant, but largely the measures announced do little to provide the kick-start that is needed – what SMEs really need is access to cash.
“The additional 1% cut in corporation tax as of next month and the extension of the business rate relief holiday for small firms for another year along with the 21 new "enterprise zones", are all good news, but the problem remains that even businesses that can find the funding are still very cautious about investing to grow at present. So, even though entrepreneurs’ relief will now cover the first £10m of gains made on selling businesses, few are likely to start towards that goal at present.”
Lisa continues: “Freezing of red tape for SMEs is good news. Combining income tax and NIC will also be helpful but it may be years before businesses see any real benefit.“
“The Chancellor has given plenty of encouragement to businesses but, if he really wants a broad based recovery, he must do more to facilitate business investment funding across the business spectrum now – the current lending “targets” for the banks are not likely to be enough.”
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For further information, please contact:
Jane Murray, PR, 020 7065 0135, jane.murray@uk.pkf.com
Notes to Editors:
1. PKF (UK) LLP is a leading firm of accountants and business advisers with more than 1,500 partners and staff operating in 23 offices in the UK mainland firm, incorporating a wholly-owned financial planning company and associated offshore practices. The firm specialises in advising growing and entrepreneurial/owner-managed businesses, AIM and fully listed companies, and also has extensive experience in the public and not-for-profit sectors. Principal services include assurance and advisory; taxation; consultancy; corporate recovery and insolvency; corporate finance and forensic. The firm has particular expertise in advising sectors such as hotels and leisure; mining and resource; public sector; real estate and construction; professional practices; not-for-profit; and medical. The firm’s web site is www.pkf.co.uk
2. PKF (UK) LLP also offers financial services through its FSA authorised company, PKF Financial Planning Limited. PKF (Isle of Man) LLC is a limited liability company registered in the Isle of Man. PKF (Guernsey) Limited is incorporated in Guernsey.
3. PKF (UK) LLP is a member firm of the PKF International Limited network of legally independent firms. The PKF International Limited network has around 17,600 people operating in 120 countries around the world.
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