Budget 2014: High street given £750m injection through rate relief
Retailers were among those that welcomed a slew of measures aimed at helping small businesses.
The decision to extend the £1,000 business rate relief into next year amounts to a £750m injection for the high street, according to Simon Tivey, from the accountancy firm PricewaterhouseCoopers.
Enterprise zones, where companies can claim discounts on business rates and higher capital allowances, will also be extended for another three years, although the British Property Federation cautioned that more incentives are needed to get growth going in "challenging zones where demand remains very subdued".
Businesses also welcomed the decision to make permanent the Seed Investment Scheme (SEIS), which helps small start-up companies to raise equity finance by offering investors a range of tax breaks.
Read more: The Independent's Budget coverage in full
Small firms are meanwhile likely to be major beneficiaries from the doubling of the annual investment allowance, which lets businesses write off capital expenditure on plant and machinery against their tax bill, to £500,000 until 2015. The allowance had been expected to drop to £25,000 at the end of December.
"If small companies can raise the money from the banks, they should jump at the chance of being able to get a full tax deduction when they come to reinvest into their businesses by acquiring new plant and machinery," said Cormac Marum, tax director of Harwood Hutton.
Another measure announced in the Budget made a tax credit available for loss-making small and medium-sized businesses (SMEs) involved in research and development.
These companies will be able to get a higher tax refund from the Government for R&D expenditure – it will rise to 14.5 per cent from 11 per cent from April 2014.
The break means the Government will now in effect be subsidising a third of the cost of the R&D, compared to a quarter before this Budget, Genevieve Moore, a tax partner at Blick Rothenberg, said.
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