Co-founder inniAccountsView Author Profile
The government owes UK small businesses a good Budget deal in the face of Brexit uncertainty.
Bored, frustrated, tired. Any of those words describe how I feel when I look at the deal no deal headlines. But mostly I’m concerned. Concerned that as the political game of ping pong rages on, there’s no clear plan for companies like mine.
There’s no one in government inspiring any confidence that they have our back.
The Budget is a chance to remedy this and build on the contribution SMEs make. We’ve helped create record levels of employment and some 70% of growth in the private sector is also down to us.
So what do we want?
Grants for sustainable productivity and innovation
To answer this question I’m going to start with what we already have but need a great deal more of, starting with R&D tax credits and grants for companies that are committed to innovation.
They are good. We’ve used them to great effect but they do nothing to help us create sustainable innovation and make a significant dent in productivity.
I need more. I desperately want to improve my productivity, and so does the Government. I can do it by investing in AI and techniques used in manufacturing. But the cost is prohibitive.
In fact, it would be financially reckless for me to go on any kind of productivity crusade. My cash flow has to be used for more pressing things that keep the business running.
So the first request is to consider larger longer-term productivity grants for companies that can show a very clear case for sustained investment in productivity techniques and systems.
An open mind to loans
I’d also like to see the British Business Bank take the lead and help companies in the service sector get loans. At the moment for any bank to give me a loan I need to be investing in making ‘things’. Innovative award winning IP doesn’t count – unless I want to put my house on the line.
Being an entrepreneur takes a bit of risk taking. I’ve proven it pays off 90% of the time. I think it’s time the banks were shown that it’s worth taking a risk and commit to helping self-starters grow the economy. The British Business Bank could show them the way.
Scale-up funds and guidance
That brings me to my next point: support for scale-ups. We are in danger of over-indexing on start-ups. I think it’s admirable to focus on start-ups – I was one and I have greatly benefitted from the help.
But we won’t create the next Google in Britain, as the Government so desperately wants, if we only focus on start-ups. We have to help companies that are ready to accelerate and scale.
I find it hard to find any help – financial or advice – now I’m a certain size and I really can’t fathom why when we are a very real source of employment and growth. Specific scale-up assiatnce is what will help us compete with the likes of France on fin-tech. It’s laid out its stall, we need to respond.
In the next year or so I will have to move premises. I have considered building a new office or taking on a derelict building. But to be economical, I need to build capacity for five, ten years time, which means I’d have a building that’s only partly in use to begin with.
I could consider renting the space to a smaller firm. Except for one very big problem. Rates. There is no way I can make the books balance with rates as they are. I’m not alone. There’s a big army of responsible employers in the same boat all feeling penalised for wanting to have a go, and grow. Let’s sort this out before Brexit takes hold.
Finally, we need to sort out the mess that is IR35. Independents contribute billions to the economy. Everyday they help businesses of all sizes stay agile by delivering complex, exciting, innovative projects.
If you ask these people why they do it, it’s because they can get interesting contracts and they pick up the children from school, or help look after an elderly relative. They do it for the flexibility it affords them and they are very happy to forego the perks employees get.
The companies employing them do so because they don’t need years of skills they just need a few days, weeks or months of it.
The Government doesn’t get this and is hell bent on breaking a working model that contributes vital income to GDP, and supports social needs. The sooner it wakes up the better.
I’ve read the rumours and it seems unlikely we will see any movement on IR35 in the Budget despite the threats made earlier this year.
My only hope is that Mr Hammond quickly addresses the concerns this buoyant market has and in time for leaving Europe, else we risk losing some highly skilled people from our economy, and undermining our position as a global leader is innovation.
And that’s the bottom line – how will we take our place on the world stage? None of these ideas above are new, or desperately wild, yet they feel brave when they over-turn a status quo. Deal or no deal we need to get ready for an uncertain future. These things could help us do that.
Personally I think it’s time to be brave and it’s time to crack on.
James Poyser is CEO of inniAccounts.
The Budget Is A Chance To Get Things Straight For Scale Ups