In yesterday’s pre-budget report, the Chancellor has announced how the government is trying to stimulate business growth in areas that have been hit particularly hard by the recession. These initiatives range from encouraging banks to lend more, to giving incentives for investors.
The following are the main points of interest from the report:
The government is going to launch a new Seed Enterprise Investment Scheme (SEIS) from April 2012. This scheme will allow individuals to invest up to £100,000 in a qualifying new start-up business and be eligible for income tax relief of 50%. Capital gains tax relief of 28% is given if 2012/13 Tax gains are reinvested in SEIS companies resulting in an astounding saving of 78% on the investment.
Capital allowances of 100% will be available in from April 2012 – March 2017 in the following Enterprise Zones: Sheffield, the Black Country, Liverpool, Tees Valley, North Eastern and the Humber.
Finally the government will inject £21bn into a National Loan Guarantee Scheme and a Business Finance Partnership. This should increase the amount of credit available to small and medium sized businesses, through the underwriting of the business loans.
Contact John or Paul in the office for more information.