Policy paper

Small business: GREAT ambition

Published 7 December 2013

Introduction - making it easier for you to grow your business

The UK is a great place to start a business - almost 500,000 new businesses were created last year. These small businesses make a huge contribution to the economy and generate around half of UK jobs. They have shown great resilience through the recession.

Around one fifth of small firms tell us they have big ambitions and are determined to expand. ‘Small business: GREAT ambition’ is our commitment to making it easier for these ambitious small businesses to grow. It responds to feedback from small businesses about how government can help at different points in their growth journey by making it easier to:

  • finance business growth
  • hire people
  • develop new ideas
  • break into new markets
  • find the right support at the right time
  • get on with doing business

This is a summary of our commitments which provides you with links to sources of information, support and advice that could help your business grow. To hear how other businesses have benefited from advice and support visit greatbusiness.gov.uk.

Infographic that shows the ways government is making it easier to grow your business.

Making it easier to finance business growth

You told us that: In the wake of the financial crisis, you’ve struggled to access the debt and equity finance you need to expand your business. You feel the banks are still unwilling to lend, you see no real market choice, and other sources of funding - such as venture capital - just aren’t available.

So we are making it easier for you to finance business growth by:

Rebuilding a banking sector which works for small business

  • To give you greater confidence and trust in the banks, we’re introducing tougher rules to govern their conduct and professionalism.
  • To protect the banking services you use, we’re creating a ‘ring-fence’ between retail banking and riskier investment banking.
  • We’re opening up the banking sector to more competition so that you’ll have greater choice in which bank you use.
  • We’ve welcomed the banks’ commitment to a more robust lending appeals process. 40% of appeals against lending decisions are now overturned and the banks will do more to raise awareness of this.

Helping you access non-bank lending and private equity

  • We’ve made it easier for you to access finance by setting up an independent British Business Bank, which will unlock £10 billion of funding over the next 5 years.
  • We’re supporting new types of lending, like peer-to-peer and peer-to-business platforms, by putting in place the right regulation and providing co-funding.
  • To help you attract investment we offer generous tax incentives through the Seed Enterprise Investment Scheme. We have also expanded the Enterprise Investment Scheme and Venture Capital Trust Scheme, creating one of the best environments to invest in early-stage and high-risk companies.
  • You can now access the public-equity market more easily: businesses listed on growth markets are now eligible for direct ISA investment. In 2014, we will remove stamp duty from the trading of shares on growth exchanges such as AIM and the ISDX Growth Market.

Tackling late payment

Cutting your taxes

  • We’ve cut the small profits rate of corporation tax to 20% and the main rate will fall to 20% by 2015 - lower than any other major economy in the world.
  • We’ve taken 360,000 small businesses out of business rates by extending the Small Business Rate Relief for 12 months from April 2014.
  • When you sell on or close your business, your employees and directors can now claim more tax relief through Entrepreneurs’ Relief.
  • You can attract and motivate talented employees by giving them a stake in the business through the Enterprise Management Incentive scheme, which offers generous tax relief.

Making it easier to hire people

You told us that: To grow your business, you need to take on staff. But you don’t know where to find the right people with the right skills, and employment regulation - which seems burdensome and complicated - is putting you off.

So we are making it easier for you to hire people by:

Making it simpler and cheaper to employ people

  • To help with the recruitment process, you can use Universal Jobmatch, a free online system which matches candidates to jobs. You can also get bespoke help through the Small Business Recruitment Service helpline 0845 601 2001.
  • From April 2014, businesses can get £2,000 relief on National Insurance bills through the Employment Allowance. As a result, one third of all employers will pay no National Insurance at all.
  • If you’re taking on apprentices for the first time you can also get a £1,500 grant for each apprentice (up to 10).
  • We’re making the payroll simpler by allowing businesses to manage all their HMRC processes online and we’ve made major changes to employment law so that it’s less complicated and more flexible.

Apprenticeship funding has already made it easier for ISIS Pet Care to hire the right staff. Hear more about how Tracey’s business has benefitted:

Isis Pet Care - a small business with GREAT ambition

Equipping the workforce with the right skills

  • From this year, young people who have not achieved a GCSE in English and maths will no longer be able to give these subjects up at age 16.
  • We’re building new University Technical Colleges for 14 to 19 year olds to teach practical and academic learning in subjects like engineering and construction. We’ll make sure businesses are closely involved so that students learn relevant skills.
  • We’re reforming vocational qualifications to make them simpler to understand and based on the skills and knowledge employers need. From December 2013, only those qualifications which are credible with businesses will be eligible for public funding.
  • Businesses are also being invited to tell us how best to invest in skills and to bid to a competitive £340 million fund to develop training that meets their needs.
  • And because you sometimes have to bring in skills from overseas we’re improving the visa application process in key emerging markets. Our premium service in India will be rolled out in China and to further countries during 2014.

Making it easier to develop new ideas

You told us that: You want to bring new products and services to market but it’s expensive, risky and time-consuming for you to research, develop and commercialise your ideas.

So we are making it easier for you to develop new ideas and products by:

Helping you fund the development of your ideas

  • You can now claim 225% tax relief on your R&D costs (up from 200% in 2011), to help you invest in innovation and growth. Through the Patent Box, you can also claim tax relief on profits gained from patented products.
  • You can apply for a Smart grant of up to £100,000 to carry out R&D projects. The Technology Strategy Board (TSB) has increased the funding for this scheme to £50 million in 2014 to 2015 and made it easier for you to apply. It has also slashed the time it takes for businesses in receipt of Smart grants to start their projects.
  • The TSB will expand its network of experts across the UK to help you tap into the €70 billion of EU Horizon 2020 funding that will be available over the next 7 years, and a Venturefest networks to help you link up with local investors.

Accelerating innovation by connecting you to partners

  • The TSB is piloting Innovation Vouchers, providing you with up to £5,000 to work with experts that can help develop your ideas, and making it easier to collaborate with large businesses and academics through Knowledge Transfer Networks.
  • You can also get access to specialist equipment and emerging technologies, as well as academic and big business expertise, via a new and growing network of Catapult Centres across the country.
  • And you can translate your ideas and products into solutions for government as part of the Small Business Research Initiative. We’re scaling this up so that more small businesses can benefit from this route to market.

Helping you protect your ideas

  • We’ve modernised and simplified intellectual property law and introduced a new service so that you can get advice on how to handle infringement of your intellectual property rights - without resorting to litigation.
  • We’ve transformed the way the Intellectual Property Enterprise Court works so that it’s much quicker and much less costly for you to use it.
  • You can find out how best to register and protect your intellectual property rights in key international markets through our specialist Intellectual Property attaches.

Making it easier to break into new markets

You told us that: You sometimes find it difficult to break into new markets, both at home and abroad because you lack the contacts, expertise and resources of larger businesses.

So we are making it easier for you to break into new markets by:

Opening up public procurement

  • To help you do business with the public sector, we’ve committed to making sure that 25% of central government expenditure goes to SMEs by 2015 and we’re making major changes to open up the rest of the public sector.
  • We’re creating a simpler public-procurement system: abolishing Pre-Qualification Questionnaires (PQQs) for low-value contracts; helping you to find contract opportunities via a single online portal; and mandating prompt payment terms all the way down the supply chain so you get treated fairly.
  • From early 2014, we’ll provide a new rating service called ‘Spotlight’ so you can judge public bodies on their procurement credentials, and public bodies can rate their suppliers so that you can build your reputation.
  • We’ll extend the reach of the Mystery Shopper, so that it not only investigates reports of unfair treatment, but also spot-checks public bodies to make sure that their procurement is small-business friendly.

John Glover at iNOVEM has already benefitted from a simplified public procurement process. Hear how it has made it easier for his business to grow:

iNOVEM - a small business with GREAT ambition

Boosting your online presence

  • 95% of UK premises will have super-fast broadband by 2017. To help with the cost of installing high-speed broadband in your site, you can apply for our new broadband voucher scheme.
  • You can get advice on how to use the internet to trade internationally via UKTI’s new Click: Connect: Sell programme.

Providing export advice and support

  • You can get help to identify and exploit export opportunities from UK Trade and Investment (UKTI). UKTI offers online resources, a network of trade advisors around the world and in-depth support for growing firms, and it aims to support 50,000 businesses per year.
  • It’s now easier and quicker to get credit insurance and trade finance via UK Export Finance (UKEF): the number of regional UKEF advisors has been doubled and application processes made simpler and quicker.
Infographic that shows hows government is helping small businesses to export.

London-based Cyclehoop have worked with UKTI and are now exporting to 15 overseas markets. Hear how UKTI advice and support has made it easier for them to export:

Cyclehoop - a small business with GREAT ambition

Removing barriers in particular industries and markets

  • We’re launching a brand new Challenger Business programme to identify the barriers that might prevent you from breaking into certain sectors.
  • You can quickly and cheaply challenge anti-competitive behaviour via the Competition Appeal Tribunal, which will offer a cost-capped fast-track regime for small businesses.
  • You’ll be able to trade across the Atlantic more easily thanks to an EU-US Transatlantic Trade and Investment Partnership. Negotiations have been launched and an ambitious deal could add as much as £10 billion annually to the UK economy.

Making it easier to find the right support at the right time

You told us that: You’re looking for advice on growing your business but you’re bewildered by the huge range of support available. It needs to be easier to access, simpler to understand, trustworthy and relevant.

So we are making it easier for you to find the right support by:

Simplifying government support and making it easier to find

  • You can find information about all government support products and services on a single website - GOV.UK - and search for relevant support using our bespoke finance and support finder tool.
  • We’re developing this so that by the end of 2014 there’s an improved, single ‘shop window’ for government support and you can find everything on offer in one place. In the meantime, if you access 1 government support scheme we’ll make you aware of others that could help your business.
  • Because a website often isn’t enough you can also access a national helpline (0845 600 9006). Helpline advisers can provide additional information and advice, and direct you to the right support.
  • You will be able to access joined-up local support through new Growth Hubs, being rolled out across the country in 2014. These will provide a single port-of-call for local advice and support.
  • Through 2014 we’ll be reviewing all the support we provide to make sure it’s relevant, we strip out things that don’t work and focus on the things that do.

Stimulating private and third sector support

  • We’re working with private sector partners to drive up quality and choice of business support. For example, you can now access a network of more than 27,000 trained business mentors, thanks to Mentorsme - run by the British Banking Association and Small Firms Enterprise Development Initiative and supported by the government. 78% of businesses that use a mentor say it benefits them.
  • We’re working with Enterprise Nation to create a new website, due to launch in January 2014, where you can rate different private providers of support and leave feedback on your experience. All providers listed on the website will need to meet minimum professional standards, to help drive up quality.
  • At the same time we will launch a new £30 million Growth Vouchers programme to help businesses test different types of support and lead to better market information about what works.

Making it easier to get on with doing business

You told us that: regulation and the way it is enforced is too costly and restrictive, and this gets in the way of running and growing your business.

So we will lighten the burden of regulation and make it easier to get on with doing business by:

Regulating only where necessary

  • Through the Red Tape Challenge, launched in 2011, we have to date announced over 2,000 regulations to be scrapped or reduced. Almost 700 changes have been implemented, saving businesses more than £218 million per year, with more savings to come.
  • We’ve made major changes to legislation you told us was particularly burdensome, like health and safety and planning laws, and we’re simplifying the tax system.
  • We’ve made it easier for you to calculate business income tax and business expenses and you can use the new Online Tax Registration Service to register your business for VAT in 3 days.
  • Next year, we will make further improvements, including a new digital service which allows you to access everything you need to manage your tax affairs online.

Making it easier to comply

  • We’re tackling lengthy, complex regulatory guidance and launching a new tool on GOV.UK to make it easier for you to identify the regulation you need to know about.
  • The new Primary Authority scheme means that even if you operate across multiple local authorities you only need to follow the advice and guidance of one - saving you time and money.
  • To prevent regulators placing multiple and overlapping burdens on you we will make it easier for them to share information and be more targeted.

Giving you a way to challenge unhelpful enforcement

  • We’re introducing a Growth Duty on all regulators, so that they have to act in the interests of growth.
  • We will also give you a stronger voice to challenge unfair decisions or heavy-handed enforcement by introducing Small Business Appeals Champions in all non-economic regulators. We’re consulting on the details of these reforms.
  • And we have launched Business Focus on Enforcement to allow business representative bodies to run reviews of regulatory enforcement in particular sectors and challenge government and regulators on what changes need to be made.