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A guide to government support for small businesses in 2018

  1. government support
    Francois Badenhorst

    Francois Badenhorst Business Editor, UKBF & AWEB Staff Member

    91 18
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    While the politicians are in Brussels, pirouetting and puffing their chests out like feral pigeons looking for a mate, Britain’s business owners are getting on with it.

    Let’s be real: it doesn’t look like 2018 will be the easiest year for the economy (and, invariably, business will feel the strain as a result). When it gets tough, a little extra support could be the difference.

    What help is out there today? Here’s our rundown. If we’ve missed any, add it in the comments below!

    1. Grants

    Today, most national and local grants focus on particular business activities or purposes.

    There are some grants for investment, some addressing energy use and the environment, some geared towards training and some in the form of tax reliefs like R&D tax credits.

    It’s not quite the landscape it was for grants, with programmes like Growth Vouchers having been wound up in 2015, not to mention the closure of the Business Growth Service in early 2016, but there is still plenty of support available.

    Let’s go through the grant options:

    Investment  

    The regional growth funds are still operational. If you’re based in a ‘economically disadvantaged area’, RGFs are a great option.

    It’s worth looking at the Enterprise Investment Scheme (EIS) or the Seed Enterprise Investment Scheme (SEIS). These schemes incentivise potential investors with attractive tax breaks.

    Innovation

    For business operating at the bleeding edge, EU funding is still very much open. The government has promised to underwrite current Horizon 2020 recipients (including those established between now and March 2019).

    There are many grant schemes that encourage research and development (R&D) activities in the UK's high-tech industries.

    Support is available for investigating an idea right through to proof of concept and development. R&D grants that focus on specific industries are launched from time to time, and there are well-established tax reliefs that support a wide range of R&D activities.

    Next year, Innovate UK, a semi-public body, has up to £19 million to invest in the best ideas for new innovations in a wide range of technology and business areas. Projects could fit into one of Innovate UK’s 4 priority areas of emerging and enabling technologies, health and life sciences, infrastructure systems and manufacturing and materials, or be outside them.

    Energy and the environment  

    These schemes recognise the additional cost for businesses that adopt or engage in investments that improve energy efficiency and reduce environmental impact.

    R&D programmes are available to companies working on developing energy and environmental products.

    Grant schemes may be available for new buildings or for refurbishing existing buildings that aim to improve energy use.

    You can claim capital allowances when you buy energy efficient, or low or zero-carbon technology for your business. This reduces the amount of tax you pay.

    Training

    You can get help from the government to pay for apprenticeship training. The amount you get depends on whether you pay the apprenticeship levy or not. It’s very likely that UKBFers aren’t paying the levy.

    If you don’t need to pay the levy, then you pay 10% towards the cost of training and assessing your apprentice. You need to:

    - agree a payment schedule with the training organisation

    - pay them directly for the training

    The government will pay the rest (90%) up to the funding band maximum. They’ll pay it directly to the training organisation.

    You could be eligible for extra funding depending on both your and your apprentice’s circumstances.

    Tax reliefs

    At a local level, if you’re struggling to keep up with your rates, you can apply for business rates relief from your council.

    Businesses with less than 500 staff and/or a turnover of under £100m or a balance sheet total under £86m are eligible for SME R&D relief. It allows companies to:

    - “deduct an extra 130% of their qualifying costs from their yearly profit, as well as the normal 100% deduction, to make a total 230% deduction.”

    - “claim a tax credit if the company is loss making, worth up to 14.5% of the surrenderable loss”

    There are corporation tax reliefs applying to film, animation, high-end television, children’s television, video games and theatre. Certified films and plays are entitled to deduct up to 80% of expenditure, while animation, video game and television activities can deduct up to 100%.

    2. National Business Support Helpline

    If you’re feeling a bit befuddled, the government has a free business support line for each country in the Union.

    The helpline offers signposting, diagnostic support and business improvement advice to pre-starts, startups, and existing businesses to help them start and grow. The service provides national information, which all businesses require, plus advice and signposting to local sources of support.

    3. GOV.UK website

    The gov.uk website features the Business Finance & Support Finder Tool.  It makes government support searchable by sector, business size, location, activity and business stage.

    Apart from the finance and support database, the website also has information on:

    - Employing people

    - Money and tax

    - Business and self-employment

    4. Government national business support programmes

    Mentors ME is one resource that is going strong. It provides access to 15,000 trained volunteer business mentors, from the SME community to boost local mentor networks.

    The Department for International Trade has recently taken over as the government’s overseas trade support service. For many years this was familiar to people as UK Trade & Investment. It provides advice on export capability and opportunities, contacts in overseas markets, arranging overseas visits, ecommerce, export training and market research. All in all, it’s still a strong resource for any would-be exporter or international trader.

    Innovate UK is the latest name for what was the Technology Strategy Board. It provides grant funding (not advice) to support R&D and innovation activity to companies across the UK mainly through web-based competitions, some of which are targeted at SMEs (eg. the Smart Programme and Innovation Vouchers). It also supports networks to connect partners to promote knowledge sharing.

    The Design Council’s Designing Demand Programme is a small national programme that helps SMEs use design to improve performance through bespoke packages of design support and coaching delivering through design associates.

    The Intellectual Property Office provides resources and support to protect intellectual property. It provides services such as workshops for SMEs, IP awareness-raising and online assessment tools. It also trains independent business advisers as IP auditors so that they can advise SMEs on IP issues.

    5. British Business Bank

    The fifth resource-set to flag is the British Business Bank. This is a relatively new government initiative. Its website has easy-to-understand information on all types of finance and their relative advantages and disadvantages.

    The aim is to make finance markets work better for small businesses in the UK at all stages of their development: starting up, scaling up and staying ahead.

    Of particular interest is the Angel Co-Fund (run by the British Business Bank). It makes equity investments of between £100,000 and £1 million in smaller businesses in the UK.

    It invests alongside strong syndicates of business angels to support businesses with strong growth potential.

    There’s also Enterprise Finance Guarantee Scheme (EFG). Businesses that have been turned down for a commercial loan can ask their bank to access the Enterprise Finance Guarantee, which backs loans to viable businesses who don’t necessarily have the security a normal loan would need.

    6. Local help for business

    Last but not least we come to Local Enterprise Partnerships (LEPs), which have grown in importance with the government’s evolving localism agenda.

    LEPs have been running since 2011. These are a voluntary partnership between local authorities and businesses in England to help local economic development.

    As a result of recent government initiatives, LEPs are being now supplemented by Growth Hubs affiliated to all the LEPs. You can find your local growth hub by using the growth hub finder.

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  2. Azam.net

    Azam.net UKBF Regular Free Member

    411 13
    Interesting and useful.

    Thank you for writing this up.
     
    Posted: Dec 24, 2017 By: Azam.net Member since: Aug 19, 2003
    #2
  3. Noah

    Noah UKBF Enthusiast Free Member

    662 142
    Thanks Francois - useful. Maybe a companion piece about where EU support will be lost, and any specific plans to replace this?
     
    Posted: Dec 24, 2017 By: Noah Member since: Sep 1, 2009
    #3
    LCowles and Kat Haylock like this.