SME under pressure.

Martin McTague, national chair of the Federation of Small Businesses, said the Autumn Statement was «high on stealth-creation and low on wealth-creation, piling more pressure on the UK’s 5.5mn small businesses, their employees and customers». Other business groups expressed dismay that the government had not done more to stimulate the economy out of recession. The Institute of Directors said it was disappointed there was no commitment to extend the super-deduction allowance, which offers 130 per cent relief on purchases of equipment, beyond next April. However, there was a warmer reception from the FSB and others for the decision to provide relief on business rates, which Hunt said would mean no increase for two-thirds of commercial properties next year.

The government has also dropped plans for an online sales tax. The Treasury had been in line to land a £3bn windfall from the annual rise in business rates based on September’s CPI inflation number of 10.1 per cent. This multiplier will instead be frozen next year, with companies immediately benefiting from any downward revaluation along with extra help available for some small businesses as well retail, hospitality and leisure groups. UKHospitality chief executive Kate Nicholls welcomed the shift in business rates but said the chancellor had failed to deliver «any plan for economic growth, despite him recognising its importance. »

The government said it was «fair that businesses play their part in reducing the UK’s debt». The move will drag thousands more small companies into paying the tax for the first time, raising £1.5bn over the next five years. The tax-free threshold for capital gains tax, charged on the sale of most assets, will be cut from £12,300 to £6,000, then £3,000 from April 2024. A cut will also hit small business owners who pay themselves in dividends in the tax-free allowance from £2,000 to £1,000, then £500 from April 2024.

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