What does the Autumn Statement mean for small businesses?

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What does the Autumn Statement mean for small businesses?

The chancellor of the exchequer yesterday (November 25th) delivered his Autumn Statement and Spending Review, outlining the government's current plans for spending and the economy.

George Osborne announced a number of measures that will have an impact on the UK's small businesses, including the creation of 18 new enterprise zones and extensions to eight existing areas.

The aim of enterprise zones is to encourage start-ups and small business growth within certain regions by offering tax reductions and other forms of support.

There will be 15 new zones developed within smaller towns and rural areas including Ipswich, Dorset and Carlisle.

It was also announced that there will be strong investment in the north of England as part of the Northern Powerhouse initiative, with a £400 million fund being established to help small businesses grow.

Another positive announcement for Britain's smaller firms related to Small Business Rate Relief. The chancellor allayed fears that the scheme was set to be scrapped by extending it to April 2017.

This means that about 405,000 of the smallest companies will continue to receive 100 per cent relief from business rates and about 200,000 more will benefit from tapering relief.

John Allan, national chairman of the Federation of Small Businesses, welcomed the announcement, noting that many small and medium-sized enterprises (SMEs) are already facing a challenging start to 2016 as they prepare for big changes such as the national living wage.

He continued: "Measures to devolve powers over business rates to local authorities provide opportunities but also risks for small businesses.

"We look forward to engaging with the government on this agenda. But also we urge the government to deliver on its commitment to fundamental reform of the wider business rates system."

Many firms will also have welcomed some of Mr Osborne's announcements regarding transport and infrastructure.

Key policies in this area included a 50 per cent rise in capital funding for transport projects by 2020 and a green light for the electrification of the Trans-Pennine and Midland Mainline railways, as well as more sections of the Great Western railway.

Carolyn Fairbairn, director-general of the Confederation of British Industry, said: "It's good that the government has increased capital spending and remains committed to road and rail investments, including the Trans-Pennine railway.

"Businesses will want to see promised projects breaking ground as early as possible in this parliament to maintain momentum."

Also among the significant changes set to affect SMEs is the launch of digital tax return forms.

Small businesses are due to receive their digital identities by 2017 and will be required to report their tax details quarterly from 2020, which could mean additional red tape and administration headaches as companies get used to the new system.

Prior to the Autumn Statement and Spending Review, there had been speculation that the chancellor was planning to scrap Entrepreneurs Relief, which allows business owners to apply for tax relief on a lifetime allowance of up to £10 million.

While there was no specific announcement to this effect, the government is still thought to be pursuing a crackdown on people who try to bend the rules of the scheme.