In a bid to help boost the economy the Government has revealed details of its Small Business Plan. The consultation, which aims to back SMEs and support growth, has been designed to help deliver £320 billion into the UK economy by 2030. So what’s been announced, and how will the plans support SMEs?
Employer National Insurance
Although not new to this announcement, the Government raised the annual Employment Allowance to £10,500 with effect from 6 April 2025. Most small businesses can claim this and offset it against their Employers National Insurance contributions.
Business Rates
To ensure high streets and town centres are given every opportunity to thrive there are plans to permanently lower business rates for hospitality, retail and leisure businesses with rateable values below £500,000. Upward only rent review clauses on commercial leases will be banned too.
Late Payments
A key reform would deal with late payments, with the ‘toughest laws on late payments in the G7’. The proposals include:
- Boosting the powers of the Small Business Commissioner so large firms who consistently pay late can be fined
- Carrying out spot checks to ensure invoices are being settled appropriately
- Requiring large companies to pay suppliers in 45 days, down from 60 days
- Auditing payment practices at board level, with greater pressure for larger firms to show that they are treating small firms fairly
- Tightening rules to exclude suppliers who fail to pay promptly from large contracts
Accessing Finance
To make it easier for SMEs to access business advice a Business Growth Service will be launched, with public bodies, local government and the private sector offering support. In addition, Expanding Start Up Loans will be offered to 69,000 new businesses over the next four years. Other financial support packages will include:
- The expansion of the British Business Finance’s Regional Angels programme, and the Nations and Regions Investment Fund
- Working with lenders on ‘appropriate use’ of personal guarantees and introducing a compulsory code of conduct for lenders
- Raising the total financial capacity of British Business Bank to £25.6 billion
- Committing to British Business Bank’s Growth Guarantee Scheme until 5 April 2030
- Increasing the ENABLE programme from £3 billion to £5 billion
- Exploring mutual and co-operative banks to open up business investment
Reducing Admin Costs
To help SMEs, particularly in the hospitality sector, there will be new steps to make it easier to extend opening hours, introduce outdoor seating and turned disused shops into hospitality venues. Other support will include:
- Raising the entitlement cap for temporary event notices, to help generate an additional £10–25 million in revenue
- Launching high street and growth incubators in Greater Manchester, West Yorkshire and the West Midlands.
Export Support
With SMEs responsible for a quarter of total UK exports the proposals aim to help small businesses export more by:
- Providing more advice and support through the Business Growth Service
- Expanding UK Export Finance’s capacity from £20 billion to £80 billion
- Offering Small Business Export Builder insurance
Training Packages
To help SMEs attract new talent a series of measures were covered including:
- New shorter apprenticeships and foundation apprenticeships
- The introduction of short courses in areas including digital, artificial intelligence and engineering
- Extra support for smaller employers to get involved with T-Levels through industry placements
- Employer support fund to help businesses in England host placements
It’s good to see the Government aiming to put more focus on supporting SMEs. SMEs are the cornerstone of the UK economy so it’s vital that these steps are introduced as quickly as possible. If you’re an SME looking for support with any aspect of your accounts please do get in touch.