Small Businesses will lead the UK out of recession

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Companies House registered a growth in new businesses of 10 per cent to 362,300 in 2009/10, up from 330,100 in 2008/9.   This compares with the previous years - 2007/8 company incorporations fell by 17 per cent to 372,000 in 2007/8, followed by a drop of 11 per cent to 330,000 in 2008/9.The emergency budget's changes to corporation tax should encourage entrepreneurship further. The 1 per cent reduction in corporation tax to 20 per cent for small firms and the threshold for entrepreneurs’ relief on capital gains tax rising from £2 million to £5 million can only help the growth of small businesses and is to be welcomed.

However, small businesses have not welcomed the planned increase in VAT from 17.5% to 20%. On average its estimated that the change will cost small businesses as much as £1,500 to make the administrative changes. It is also bound to put some consumers off making large purchases once its introduced, though expect to see a surge in sales in the run-up to Christmas as shoppers seek to beat the rise.

One other possible piece of good new is that the Business Secretary Vince Cable has announced the first phase of his plan to curb ‘excessive regulation’ of businesses earlier this year. If the coalition government keeps to its promises on this it may help to reduce the burden of regulation on small businesses in particular.

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Mark Prisk MP announced as new Small Business Minister in Coalition Government

The new Liberal Democrat-Conservative coalition government has announced another ministerial appointment, that of Mark Prisk MP, who has been appointed small business minister.

The Tory MP for Hertford and Stortford will be responsible for helping to develop and implement a range of measures to support British small business, and he will report directly to his fellow Liberal Democrat minister for Business, Innovation and Skills Vince Cable.

The new government has indicated it aims to reduce taxes on businesses, and to introduce a new loan guarantee scheme for firms that cannot secure commercial credit without government help. The appointment of Mr Prisk has been welcomed. Mr Prisk has personal experience relevant to his appointment, having set up his own firm during the recession of the 1990s, and he believes he has suitable experience for the role.

The new minister told the Telegraph during the election campaign: “What I am hearing from small businesses is ‘Get off our backs and let us get on with the job.”

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