Spring Statement 2022: Tomorrow may never come for stricken SMEs hungry for handouts

March 23, 2022

Business owners will be raising two cheers at best for Rishi Sunak’s Spring Statement.

Battered in the recent past by Covid, uncertainty from Brexit and now surging inflation compounded by war in Ukraine, UK enterprises had hoped for a little respite from the Chancellor while they pondered their viability for the foreseeable future. February insolvencies doubled against the same month in 2021 and were above the pre-pandemic figure in 2020. Creditors’ Voluntary Liquidations also doubled.

The headline message was about measures to help businesses boost investment, innovation, and growth. Accelerating a new culture of enterprise will, the Chancellor hopes, lift growth and productivity among UK businesses – 99% of which have less than 250 employees.

This isn’t going to happen overnight. Nonetheless, there are some useful immediate gestures towards this goal. Increasing the Employment Allowance, allowing smaller businesses to shrink employers National Insurance bills each year, is worth up to £1,000 for half a million smaller businesses and starts on 6th April. It takes the total number of firms not paying NICs and the Levy to 670,000.

Two new business rates reliefs are being brought forward by a year – on a range of green technology used to decarbonise buildings, including solar panels and batteries, while some heat networks will also receive 100% relief. These will save businesses more than £200m over the next five years.

R&D reliefs are being reformed, delivering better value for for the taxpayer while increasing allowances where they count most. This April will also see 50% business rates relief for a large number of retail, hospitality, and leisure properties, worth a decent £1.7bn for small businesses.

However, traditional sectors such as manufacturing, engineering, and transport understandably bemoan the fact that help with businesses’ astronomical energy costs – hitting them hard right now – remains lacking. Extending energy grants would have given manufacturers immediate help to cut their largest bills and stay afloat.

The Chancellor has, perhaps unsurprisingly, focused for now on the cost of living. Meaningful support for businesses seems to be delayed until a Tax Plan and more details for investment help, including apprenticeships, are announced in the Autumn Budget. They have yet to be finalised and agreed. It will be too late for some.

Buchler Phillips is the UK’s leading independent corporate recovery, restructuring and turnaround firm.

How can we help you?

We offer initial free confidential advice without obligation.