Amongst all the Brexit uncertainty this week, the Chancellor of the Exchequer, Philip Hammond, delivered his Spring Statement.
Mr Hammond kept his statement concise and promised that he would return to parliament with a three-year spending review before the summer recess.
Although the statement was brief, there were many points relevant to SME businesses. We dissect the Spring Statement and tell you what you need to know below.
No more late payments
Mr Hammond said that the government’s plans will “restore confidence and unlock a brighter future”. He stated that the government has plans to tackle the late payment problem that many supply chain businesses are facing.
Post Spring Statement Simply Business reported that “late payments continue to affect small business cash flows everywhere. The Federation of Small Businesses (FSB) says as many as four out of five firms have been paid late.”
Moving forward large companies must have an audit committee in place. This committee should be led by a non-executive director and will be required to report on payment practices when dealing with small businesses annually.
This week the BBC reported that “businesses looking to secure public sector contracts will need to do more to help improve society” and during the Spring statement sustainability and efficiency was high on the Government’s agenda.
The Chancellor has pledged to increase the amount of ‘green gas’ in the National Grid and has set a goal that by 2025, all new homes will be ‘future-proofed’ with low carbon heating, as opposed to fossil fuel-based heating systems.
It was also announced that there will be a ‘call for evidence’ that will focus on the benefits of energy efficiency and carbon reduction for SMEs. The results of this will lead to SME-specific investment commitments.
Investment into apprenticeships
Mr Hammond announced that there will be further support for businesses implementing apprenticeships. £80 million will be placed to help get three million new apprenticeships started by 2020. During his speech he said:
“to help small businesses take on more apprentices, I can announce that I am bringing forward the £700 million package of reforms I announced at Budget to the start of the new financial year in April.”
From 1 April, employers will see the co-investment rate they pay reduced from 10% to 5%, while levy-paying employers are “able to share more levy funds across their supply chains”, with the maximum amount rising from 10% to 25%.
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