Small Businesses To Be Given A Helping Hand

A new 95m fund designed to help small businesses grow and create thousands of new jobs

, including freelance jobs, has been announced by the Prime Minister.

Speaking at a business conference in London just a few days ago, David Cameron said grants would be awarded through the Regional Growth Fund, which is set to be administered by RBS, NatWest and HSBC. According to a report by The Independent, ministers anticipate that the scheme could unlock as much as 500m of new investment by small and medium businesses, with many of those who will be looking to find a freelancer in the future, to fulfill their business needs.

The idea is for small firms that are unable to secure commercial funding to support investment in new capital assets and the creation of new jobs to seek government support through the banks' regional networks.

Business Minister Mark Prisk said: "These schemes will directly help SMEs that want to invest and create new jobs. They will deliver a shot in the arm to local communities and help small businesses drive local growth; 100% of the RGF funding will be provided as grants to small businesses with the banks employing their regional networks to administer the schemes for free."

This announcement came shortly after new data released by directory firm Yell has revealed the appetite among small businesses for digital growth.

The company said yesterday that it now runs 355,000 websites for its customers, up from 124,000 last year. According to Internet Retailing, the company's total number of digital customers grew by 11.1% to 940,000 during the 26 weeks to September 30, compared to the same period last year. The average digital spend by those customers was also up 3.2% to 523.

The firm's Chief Executive said new digital products were appealing to SMEs and had helped the company to boost income from all its digital services by 149.1% to 63.6m, and its total digital revenue by 9.1% to 236m. The results highlight the growing importance that small businesses now place in having a strong digital presence and finding new businesses online.

It also looks as though small businesses have been advised they could be set to benefit the impending closure of a tax loophole, after it was revealed hundreds of millions of pounds in VAT revenue is being lost each year.

The coalition has confirmed that Low Value Consignment Relief (LVCR), which exempts low-value exports from the Channel Islands from VAT, will end next April. The measure was originally introduced in 1983, but estimates suggest it now costs UK taxpayers around 140million annually.

These reforms will ensure that UK companies, especially small and medium-sized enterprises, can compete on a level playing field with those larger companies with the resources to set up operations in the Channel Islands, said Exchequer secretary to the Treasury David Gauke. We are also protecting a significant amount of tax revenue.

While the government of Margaret Thatcher believed LVCR would provide an overall saving by eliminating the administrative costs of imposing VAT on cheap imports, the rapid growth in online retail has resulted in a major VAT loss to the Treasury, as well as putting mainland businesses under pressure.

by: Tim Bisley

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