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UK government support for small businesses

UK government support for small businesses

  • Starting a business and growing it is a difficult challenge, so it is natural for entrepreneurs to tap into all the help they can find. But many companies seeking support are lost in the face of the large number of government initiatives and ultimately forego this support. Here is a light on the government assistance available, their role and how you can access it.

    GOV.UK website

    GOV.UK is the portal that centralizes all UK government services and information. It provides information and advice on starting and running a business, the entrepreneur's statutory rights and obligations, and the ability to seek assistance using the Funding Finder and 'assistance.

    The Business Funding and Assistance Finder is an interactive tool that allows you to fill in your industry, business size, location, activity, and business stage. It allows businesses to seek government-backed support and funding, including:

    • Grants, funding and loans
    • Business support, eg. mentoring, counseling
    • Financing for small and medium-sized businesses and startups

    The website also contains information about

    • Hiring and employment
    • Money and tax
    • Business and self-employment

    Coronavirus aid

    A range of financial supports have been created by the government to help businesses cope with the coronavirus epidemic.

    Loans

    The Coronavirus Business Interruption Loan (CBILS) program provides loans, overdrafts and other financial support of up to £ 5million for affected businesses.

    The Future Fund is accessible to innovative and high-growth companies. It is aimed at businesses that depend on capital investments and are not eligible for other government support programs. Loans range from £ 125,000 to £ 5 million. An accountant who knows the world of startups will be able to tell you if your business is eligible.

    Loans and grants of £ 750 million are also available for SMEs positioned in research and development through Innovate UK. Around £ 550million will be used to increase support for existing customers, while £ 175,000 will be made available for the 1,200 companies not yet receiving funding from Innovate UK.

    The Bounce Back Loan Scheme (BBLS) allows SMEs to quickly access financing during the epidemic. Loans range from £ 2,000 to £ 50,000.

    Grants

    The Retail, Hospitality and Leisure Grant Fund is available and provides eligible businesses with up to £ 25,000 from their local council. To be eligible, the assessed value of your business must be less than £ 51,000 on March 11, 2020.

    If you are the owner of an SME that is not part of the sectors of activity concerned, you may be eligible for the small business grant fund. This grant provides a one-time cash grant of £ 10,000 for rural small businesses in England.

    If you are not eligible for any of these grants, you can apply to the Discretionary Grants Fund, where you can receive funding of up to £ 25,000 for your business.

    National telephone support for businesses

    The business support helpline is a key part of government arrangements. Entrepreneurs will find advice, diagnostic assistance and improvement advice for businesses in the creation and start-up phase, startups and existing businesses. The service provides national news and information, advice and signage for local support useful to all businesses.

    In addition, there is a service offering more in-depth assistance to businesses with immediate or more complex needs or who may be at risk. This service is managed by a small team of experienced business support consultants. Companies are entitled to 60 minutes of free and personalized telephone support, adapted to the needs of the entrepreneur.

    Businesses can call 0300 456 3565 9:00 a.m. to 6:00 p.m. Monday to Friday, ask questions via LiveChat, or tweet @businessgov using #BusinessSupportHelpline to engage with an advisor.

    Local help for business

    The government has created a network of 38 local growth poles, which partner and provide support to local businesses.

    It is a one-stop local access point for all business support in the public and private sectors, for LEP programs and other economic support with free assistance on issues ranging from corporate finance to Brexit.

    Chambers of commerce, the Federation of Small Businesses, business schools, enterprise zones and banks are the partners of these growth poles.

    Financial support

    Start Up Loans Company

    The Start Up Loans Company is a subsidiary of the British Business Bank and finances loans of up to £ 25,000 for business ideas with potential or for businesses less than 24 months old. These loans come with counseling and mentoring.

    Entrepreneurs wishing to qualify for Start Up Loans Company loans must be at least 18 years of age, based in the UK, and resident in the UK. 

    The program has already supported more than 50,000 business ideas with more than £ 350 million in loans.

    Regional grants

    There are regional grants that support growth through capital investment and job creation. It is therefore recommended that you study the location or set up your business as this can increase or decrease your chances of obtaining a grant. An economically disadvantaged region with a high unemployment rate or a particular area gives entitlement to subsidized rents and rates or other aid.

    New company allowance

    If you are over 18 and you or your partner is in receipt of support (for example, universal credit, job search allowance, or employment and support allowance), you may be eligible for the allowance new business to launch your business.

    You will be followed and accompanied by a mentor who will give you advice and support to help you set up and start your business. Once you've established a business plan with your mentor, you may be eligible for weekly grants of up to £ 1,274 over 26 weeks and can apply for a loan to help cover start-up costs.

    Tax reliefs

    The government offers support to small businesses by reducing some of their tax obligations.

    Annual investment allowance

    If you need to buy assets like plant and machinery, you can claim tax relief on the full value of those items in the first year of purchase. This does not apply to the purchase of cars and the eligibility criteria are strict. Also, you may have to pay tax if you sell the item after claiming it. The AIA amount has temporarily increased to £ 1million until December 31, 2020.

    Capital allowance

    If you buy an asset that qualifies for first year allowances, you can deduct the full cost from your pre-tax profits and it is not factored into your annual investment allowance. On the other hand, if you use energy efficient equipment you can apply for “improved capital endowments”.

    Creative industry tax reliefs

    If your business contributes to the creative industry, you may be affected by one of the eight corporate tax breaks that allow businesses to claim a larger deduction or, in certain circumstances, a tax credit payable to the when calculating your taxable profits.

    Employment allowance

    You can reduce your national insurance bill up to £ 3000 if you have multiple employees. You can claim it every month when you make your payroll. You will then not have to pay any national insurance contributions until your £ 3,000 allowance has been used up or the tax year ends.

    Entrepreneurs’ relief

    If you sell your business or give up part of it, this program allows you to pay only 10% capital gains tax on any qualifying asset.

    R&D tax credits

    Research and Development (R&D) tax break for projects that attempt to advance science or technology is a corporate tax break that can either lower a company's tax bill or allow them to obtain a sum in cash.

    Seed Enterprise Investment Scheme

    If your business is less than two years old and you have less than £ 200,000 in assets, you can use this program to incent potential investors to finance your development through tax breaks for individual investors who buy new shares in your business.

    There are other national business support programs, the Arts Council Grant Scheme, the Department for International Trade’s export hub, the Design Council or Innovate UK. Do not hesitate to ask your accountant for information on these programs.

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