Business Finance: Access a key issue in business support, says Sam Vanags of KPMG

Sam Vanags, Tax Partner at KPMG in East Anglia .

Sam Vanags, Tax Partner at KPMG in East Anglia . - Credit: Archant

In his Autumn Statement, the Chancellor announced further measures to support and promote small businesses.

With a focus on science and innovation, improved rate relief and research and development tax credits for smaller enterprises, rapid growth in early stage businesses is anticipated to drive forward economic growth.

A £45million investment to facilitate exports to developing countries, National Insurance discounts to businesses taking on apprentices and the previously announced raft of increased bank lending and other investment available to smaller companies are all welcome.

However, there seems to be a disconnect between what is available to smaller private businesses and what they feel able to take advantage of, so are these businesses realistically able to access all the opportunities available to them?

Recent KPMG/YouGov research found that while awareness of some Government-led initiatives is high, some are still underused. A surprising 80% of SMEs in the East have not used these resources. Even more worrying is that fact that, of the businesses that we spoke to, just 4% of local businesses had taken up R&D tax credits and not one had used the Patent Box regime.

R&D tax credits were launched in 2000 and are a straightforward initiative that can be applied to a wide variety of businesses and sectors, not just R&D-based ones, so a take up rate of 4% seems low. They work for any business which faces technological challenge, which may involve something as simple as putting in a new computer system.

The Government wants enterprises to take advantage of these incentives as they have a clear purpose to accelerate the economic upturn. The more companies are made aware of and take them up, then the better for business and the whole economy.

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KPMG’s research indicates that the Government needs to build a support network for businesses to access these opportunities. We’ve suggested the creation of a single gateway providing access to all these initiatives.

Currently, tax initiatives sit under the HMRC banner (and are dotted throughout our extensive tax legislation) while other initiatives are run from the Department for Business Innovation and Skills.

It is really important that SMEs are signposted to and make use of these initiatives, which will not only benefit their businesses but will also deliver a lift for the economy.

: : Sam Vanags is KPMG’s tax partner in East Anglia.