In the month of December, the UK stock market often experiences a phenomenon known as the “Santa rally” – a rise in share prices in the run up to Christmas. Last year however, following the December 12th general election, investors saw a sharp “Boris rally”, with the FTSE 100 having put on an impressive 5% since the Conservative’s stonking victory.
As we enter a new year, we see many further opportunities for investors, and entrepreneurs in particular, assuming that the Tory’s execute their pre-election promises. Their manifesto was notably business friendly, with a significant section dedicated to “Make Britain the best place to start and grow a business”. Here are four things to watch out for in 2020, especially around Chancellor Sajid Javid’s upcoming Budget on 11th March.
The government has for a long time encouraged investment in start-ups, especially via the tax beneficial EIS and SEIS schemes, which are set to remain in place during the current session of Parliament. Going one step further, the R&D tax credit scheme is set to increase to 13%, up from a current level of 12%. Perhaps more importantly for some firms, the definition of R&D will be reviewed so that investments in cloud computing and data, which boost productivity and innovation, are also incentivised.
Lower business rates
UK business rates have been a significant burden on companies which operate out of a physical property in recent years. Many sectors, especially high street retail, have suffered as rising rates eat into margins in what are already challenging times. The Conservatives have promised to reduce business rates, although the only detail we have is that it will be done following a “fundamental review of the system”. Encouragingly, as a first step, the plan is to reduce rates for retail businesses specifically, as well as extending the discount to grassroots music venues, small cinemas and pubs. Cheers!
Increase in the Employment Allowance
Also helping margins, the Tory’s have committed to increase the Employment Allowance for small businesses. This boon allows firms to reduce their employers’ Class 1 National Insurance payments up to a maximum of £3,000 each tax year. While we don’t know the extent of the increase yet, it is estimated to create a tax cut for half a million small firms.
Influx of new entrepreneurs
The Exceptional Talent Visa provides a way to working in the UK for individuals outside of the EEA considered to be a recognised or emerging leader in fields such as science, medicine, engineering and digital technology. There is currently an annual cap of 2,000 such visas but it has been suggested that this limit will be revised or even scrapped, enabling more entrepreneurs to start their businesses here in the UK. Some commentators are also looking for the visa’s talent threshold to be lowered, perhaps using an Australian style points system, increasing the number of highly skilled migrants eligible to apply.
If you want to raise funds for your business in 2020 find out more HERE