Business leaders at Tyrrells Crisps, Metcalfe's Food and Nutmeg make their Budget 2015 requests
25 min read
13 March 2015
In the lead up to chancellor George Osborne's final Budget announcement before the May general election, Real Business has spoken with 23 entrepreneurs and business leaders to find out what policy would best aid their enterprising efforts.
The coalition government is getting its house in order, preparing to butt heads with Labour, UKIP, the Greens and the SNP and get the best return when the electorate go to the poll. But that doesn’t mean that companies up and down the UK don’t have a few Budget suggestions.
From cutting business rates to dealing with late payment problems, extending the remit of SEIS and EIS to boosting broadband speeds, there are no shortage of announcements the business leaders we’ve spoken to would like to see come out of Osborne’s red briefcase.
Oren Greenberg, founder and MD of curve, said:
“The government’s growth voucher programme has only passed £3.6m of the proposed £30m on to small businesses. Further investment is required to change this, and a more effective policy encouraging growth should be put in the budget to help small businesses, which are vital to the economy. Investing £26 into a small business can help generate £286 for the local economy, compared to only £121 for larger businesses; which highlights the benefits for local communities.”
Ian McIntosh, CEO of RED Driving School, said:
“I think it is imperative that the country stays on course and does not lurch back into old habits such as boom and bust cycles. Now is not the time to start huge spending programmes or giving huge tax cuts. That said, what business needs, particularly SME’s, is stability, confidence and reassurance with respect to the business environment. Investments are typically made with a relatively long-term view and believing the economy is in a well-managed recovery is therefore key to investment and business growth.
“The best help for companies such as RED Driving School who provide consumer services is high employment levels. I would like to see the government increase its commitment to getting young people into employment and this could be any number of incentives, which would be most helpful. An example would be to offer financial support in the form of tax breaks for employers taking on people under 25 years old.”
Darren Fell, MD of Crunch Accounting, said:
“Although the government has time and time again praised the UK’s self-employed population, they have yet to enact any meaningful legislative changes for freelancers and contractors. With Labour and the Greens promising equal rights for the self-employed if they are elected, we’d love to see the coalition move to do something similar.
“This isn’t even a party political issue, everyone is agreed that the UK’s self-employed population are short-changed. We just need the government to put its money where its mouth is and actually do something.”
Nicholas Russell, CEO of We Are Pop Up, said:
“While the discussion about business rates reform goes on, high street retailers must pay today’s business rates. In some cases, rates even exceed rent.
“There’s a lively debate about the 15 per cent of shops in the country that are vacant – and how business rates play a part in keeping them empty. The Budget needs to recognise this and ideally there will be a far-reaching reform of rates, to better incentivise vibrant high streets.”
Seema Paterson, LendingCrowd’s Head of Corporate Affairs, said:
“Furthermore we’re hoping to see some moves to support business. The CBI has recently urged George Osborne to make life easier for medium-sized companies with more investment allowances and extending research and development credits. We are hoping that increases in personal allowances and pension reforms will give people more options to invest potential extra funds they may have. Peer-to-business crowdlending will give them one of many options to reinvest more capital. Retirees, for example, will have the option to take out and reinvest a lump sum from their pension into a P2P investment of their choosing.”
Jason Downes, MD of Powwownow, said:
“At the moment, the government have too much interest in saying the right things in order to be elected but then fail to follow this up through actions. I think the government should ultimately work harder to listen to the people running SMEs to understand their priorities and grievances. Perhaps setting up a task force or appointing a board of consultants could be a solution for the future.
“Broadband investment is a subject that is often talked about and yet very little ever seems to be done. Year after year, Britain is slipping outside the top ten nations for internet speed. The quality of our internet access isn’t as good as you would expect with the resources we have available. People in other countries find it astounding when they come to the UK that they can’t do business in certain places due to a lack of internet connection.”
Danvers Baillieu, COO at HideMyAss, said:
“From the point of view of business, the government should follow the twin clear goals of creating a regulatory environment which is conducive to enterprise and to deliver sustainable economic growth. On the second of these, George Osborne is right to put great emphasis on his long term economic plan as ultimately this is what will create prosperity in the UK. Too many people are obsessing over the lack of policy initiatives ahead of the election, whereas I am happy to have a break from short-term gimmicks and bribes, as we got at the tail end of the last Labour government.
Richard Harris, director at Richard Harris Tutor and Tutor Desk, said:
“The kindest thing the government can do for my business, and the growth of wealth in our communities, is to do as little as possible. The great benefit of the free market is that, when left to its own devices, we find extraordinarily innovative ways to deliver the wants of the population.
“As a baby entrepreneur, I was terrified in to paralysis when looking up all the cryptic legal edicts on business. Added to this, whenever one has the unfortunate necessity to deal with one of the monstrous tentacles of government, the service received is often so appallingly slow, shoddy and disinterested that it makes the eyes water. This bad service is especially painful for me as a businessman, since my organisation strives so diligently on excellent service. For me, the less I have to deal with the government, the more time I have to spend on servicing my customer.”
James Codling and Paul Moravek, co-founders of VentureFounders, said:
“As one of the top four entrepreneurial countries in the world, George Osborne needs to show commitment to maintaining government support to UK businesses and entrepreneurs.
“Firstly, we call on him to increase the amount that can be raised by companies under SEIS from £150,000 to £250,000 to give these early-stage businesses the capital they need to achieve their growth potential. This will ensure that more money is being invested in fledgling businesses, and that investors are rewarded with tax efficient ways of making investments in UK plc.
“Second, and equally as important, is being able to raise sufficient equity capital at the outset of a new venture in order to enable these entrepreneurial businesses to grow without constraint. We firmly believe that businesses should be able to raise capital concurrently using both the SEIS and EIS schemes. Under the current rules, a company can only issue new shares and bring in more capital once it has spent 70% of its SEIS money. Raising investment takes a considerable amount of time and effort; management is best served running the business rather than continually meeting investors and fundraising.”
Shalini Khemka, founder and CEO of E2Exchange, said:
“A significant amount has already been achieved by the chancellor and the Office of Tax Simplification (OTS), however E2Exchange hopes to see these efforts continued through further tax simplification to ensure that businesses remain competitive, open for business and to encourage companies to expand, create wealth and jobs. A complicated tax system makes it increasingly hard for businesses of all sizes to understand and forecast their tax liability. We would therefore like to see a single tax account system for small businesses and for HMRC to begin accepting monthly tax payments.
“E2Exchange also welcomes tax relief for small businesses through a lower corporation tax rate and to abolish business rates for small businesses with turnover of under £1m. We also call for further support and financing for companies exporting to new markets in order to help shrink the UK’s widening trade deficit.”
Read on to find out what David Milner of Tyrrells Crisps and Robert Jakobi of Metcalfe’s Food would like to see happen.By Hunter Ruthven
David Milner, CEO of Tyrrells Crisps, said:
“With the government planning to increase the number of exports to £1tn by 2020, a number of government bodies, such as the UKTI are championing businesses beyond Europe, positioning British products as superior class. We are fully supportive of capitalising on these overseas opportunities and we’ve personally seen huge success in international markets and currently export to over 36 countries – offering a ‘little piece of Britain’ worldwide.
“That being said, for first time exporters this target can be a daunting prospect, and as a result we would like to see increased support in the form of mentoring, funding and the easing of barriers to enter international markets. We would suggest increasing numbers of mid-sized and global brands, such as ourselves should also support local businesses to share knowledge and expertise, providing an additional support network.”
Robert Jakobi, MD at Metcalfe’s Food Company, said:
“There are concerns that the next UK government will announce changes to entrepreneurs’ tax relief, something that would be an enormous blow to small businesses up and down the country.
“In his Budget statement I would like to see the chancellor make a commitment to continue this hugely beneficial tax break for small firms, rather than reducing the limit for qualifying gains that is currently set at £10m.
“Entrepreneurs’ tax relief provides a fantastic incentive for business owners to grow their companies, invest in innovation and to take on more staff – something that is vital to the future success of the UK economy.”
Simon Leech, CEO of Validis, said:
“There are two key things that entrepreneurs should be crying out for ahead of next week’s Budget report: clarity on tax when they borrow money, and cashflow protection.
“Lack of lending support for SMEs remains a problem. Although improvements have been made to the way British Business Bank supplies credit, the uncertainty about tax is the gaping hole in SME financial planning. Tax obligations are hazy and that undermines an SME’s confidence in seeking finance and knowing how it can be used to fuel growth. Alternative funding methods, such as crowdfunding and peer-to-peer lending, are growing in popularity. Political parties must offer more clarity on their approach to regulatory or tax treatment of traditional and alternative funding platforms.”
Read more about the Budget 2015:
Rich Wagner, CEO and founder of Advanced Payment Solutions, said:
“No doubt the British Business Bank, brought to life in the December Autumn Statement, will resurface as an attempt to support SMEs to gain alternatives to bank lending. After all, the Funding for Lending Scheme, designed to encourage traditional banks to provide funding to SMEs, has been haunted by disappointing lending figures since launch.
“If the government is to truly support SMEs in gaining fair access to banking facilities, full support should be given to the alternative financial services space, helping them to achieve direct access to the payment systems so that innovative players that operate in fintech in London and the wider UK can develop and deliver cost effective alternatives to SMEs. Small businesses, especially startups are presented with limited choice for their banking needs and that needs to be improved and fostered. As the final Budget before the election, Osborne will need to offer SMEs more than empty promises, if he is to win support from this crucial market segment.”
Philippe Gelis, CEO and co-founder of Kantox, said:
“The personal tax-free allowance on income has so far grabbed the most pre-Budget headlines, with a worrying lack of sight of measures that may be introduced to address the needs of the 5.3m SMEs in the UK.
“Economic recovery has been flourishing, but small businesses need to be supported in order to continue this growth. A tax relief for the costs of researching entering a new export market would be welcomed with open arms – this is a move supported by the British Chamber of Commerce, amongst other significant business organisations. With China’s International Payments Service nearly ready to be launched, this would be the right time for businesses to consider how they can take advantage of the Chinese economy and escape the uncertainty of the unstable euro zone.”
Duncan Cheatle, founder and CEO of Prelude Group and The Supper Club, said:
“I don’t think we can expect to see anything too radical in the chancellor’s Budget, however with the election looming, the high-growth business vote should be a priority. We need to see support for the real wealth-creators in this country, the fast growing and mid-size firms that create new jobs and contribute so much in taxes. A rethink on business rates is also overdue but at this stage in the election cycle I doubt we will see much on this.”
Ben Black, MD of My Family Care, said:
“I’m desperate for some clarity on childcare funding. Childcare is one of those areas that is relatively generously funded but has still ended up as a complete mess. New Labour were the first to invest heavily in childcare but managed to screw the whole industry up by never deciding whether the funding was about getting women back to work or about creating affordable quality childcare.
“The coalition hasn’t been brave enough to fix it but just maybe they will show a bit of conviction and clarity in their final Budget. In these days of more agile working employers wouldn’t need too much financial encouragement to spend far more than they already do supporting their working parents.”
Nick Hungerford, CEO at Nutmeg, said:
“We’d like to see ongoing support for the UK’s high-growth businesses via an extension to entrepreneur’s incentives – both an increase in Entrepreneur’s Relief and the Enterprise Investment Scheme (EIS). Given the contribution they make to the UK economy, it is vital entrepreneurs are rewarded for their achievement and that the government continues to promote and protect the next generation of successful businesses.
“We call for the government to base the lifetime allowance on private pension contributions and not on the total value of pension pots. The current system discourages sensible, regular investing over a long time period. It penalises good investors who have started early and invested well over their lifetime, building up a big retirement pot. Instead it is skewed towards those who just want to stash a portion of their money away to shelter it from tax.”
Neil Addley, MD of Trusted Dealers, said:
“As what could be the most important election of our time approaches, political parties are trying to secure as many votes as they can and we know from history the importance of motorists’ vote in pivotal political moments – from Tony Blair’s Mondeo man to Margaret Thatcher’s wooing of the white van man.
“With this in mind, I’d like to see all political parties pledge to continue to recognise the contribution motorists make to the economy and business and deliver some much-deserved policies to ensure a fair deal for them.
“Whilst I welcome the government’s £15bn pledge to invest in road building and maintenance, there is always more to be done and I’d like to see the chancellor promise to continue to improve the country’s infrastructure to reduce congestion and delays and boost the economy. The country’s roads are riddled with potholes costing motorists and councils money. “
Guy Mucklow, co-founder and CEO of Postcode Anywhere, said:
‘’Consistent policies which are consistently applied is what entrepreneurs are looking for from the government, both in this Budget and in all aspects of policy. By that I mean incentives which are designed for the risk takers and not the financial engineers who have made a mockery of the current Entrepreneurs Relief.
“One of my main concerns, as an entrepreneur who has spent the last 15 years building a successful business which now employs over 50 people and is looking to significantly scale, are changes to the some of these incentive schemes, and in particular Entrepreneurs Relief.”
Martin Campbell, MD at Ormsby Street, said:
“There is a major problem for UK SMEs with on-going cash flow, partly brought about by the continued late payment of invoices. So I’d welcome any measures that help small businesses deal with cash-flow better. The government has already announced plans to protect smaller companies from long payment delays for work carried out by the public sector, with plans to implement EU rules on public procurement which would mandate 30-day payment terms throughout the supply chain.”
Gerard Toplass, founder and CEO at Frillo, said:
“One major issue I’d like to see addressed in this year’s Budget would be the easing of current regulation so that SMEs have better access to public sector procurement and tendering processes. The current system we have in place all too often favours larger enterprises which can be damaging to competition by wiping out a whole section of the marketplace.
Whilst it is pleasing to see the amount of CAPEX grants available to SMEs, much more can and should be done to help firms that want to invest in their own systems and train their staff. Most business owners understand the value of training, and I hope that this year’s Budget will make it easier for SMEs to help their employees add additional skills, and feel valued and more challenged in their day-to-day roles.”
Giles Redmayne, founding partner and business director at Purpose, said:
“Like many business owners, I fully support the plan to reduce corporation tax to 20 per cent, but one would hope the chancellor will announce more measures to help and encourage growing businesses across the country.
“More attention needs to be paid to the thriving entrepreneur and start-up communities based around the UK, especially the developing hubs in cities such as Birmingham, Bristol, and Manchester. Whilst all fast growing businesses need to be nurtured in order to succeed, it’s important to look at, and bear in mind, the networks located outside of the capital also.