The Office for Budget Responsibility (OBR) on Tuesday 29th November published an updated UK economy forecast. The Chancellor, George Osborne, later that afternoon responded to the forecast inside the House of Commons.
Osborne re-iterated that the forecast did not predict another recession for Britain, but that they had lowered the short term growth prospects. He also stressed that the OBR forecast made an assumption that the euro would “find a way through the current crisis”.
We thought it would be beneficial to bottom-line some of the major implications for SMEs below:
- Credit easing – The Government is launching measures of a value up to £21 billion to ease flow of business credit. Up to £20 billion is designated for the National Loan Guarantee Scheme, and the final £1 billion for the Business Finance Partnership.
- Small business rate relief holiday – Current small business rate relief holiday will be extended another six months by the Government from 1st October 2012, who will also allow businesses to defer 60% of the increase in their 2012/2013 business rate bills.
- Employment regulations – The Government aims to introduce a “Rapid Resolution” scheme in order provide quicker and cheaper alternatives to tribunal hearings in simple cases. They are also looking to reform two areas of UK employment law, including the possibility to introduce a compensated no-fault dismissal for micro-businesses with fewer than 10 employees, and make a quicker, simpler and clearer dismissal process, by potentially reviewing ACAS codes.
- Corporation tax rates – Continuing plans announced in March, the main corporate tax will fall another percentage point to 25% from 1st April 2012. Currently there has been no announcement about the small company rate (currently 20%) for next year.
