Autumn statement & crowdfunding
What does the Autumn statement mean for crowdfunding?
“It’s the most wonderful time of the year” sang London’s financial journalists as Chancellor of the Exchequer Phillip Hammond thrust his signature red briefcase towards the sea of press gathered outside Number 10. But, what, metaphorically speaking, is inside? And, how will it affect SMEs and startups?
Luckily for us, Virgin Startup have taken one for the team and dissected the budget. For startups and small business owners, and any firms thinking about crowdfunding, the statement is clear; and it’s a positive one.
Here are some reasons for small and fledgeling firms to be optimistic in these times of financial uncertainty:
5G technology (yep, that exists now) will soon be rolled out in London. Anyone familiar with modern startups will know that better connectivity, particularly for those always on the go, is great news.This is good news for crowdfunding campaigners. With investor emails pouring in and social media interactions popping up at every turn, you can’t afford to leave a potential investor’s question unanswered while you’re stuck on the tube.Tax Breaks “for the digital age”
5G isn’t the only technological embrace from the government. Micro-entrepreneurs will enjoy two new tax-free allowances worth £1k a year and receive “a tax break for the digital age that 500,000 people will benefit from”, according to Virgin Startup.Considering that many businesses using crowdfunding are micro-entrepreneurs, and rely on digital platforms for the entire process, this is a welcome change.
Meanwhile, money generated from a crackdown on tax for larger corporations will go towards small businesses. The public debate around corporate tax avoidance has rightly intensified in recent years with high-profile cases involving the likes of Amazon, Google and Vodafone making headlines.Taxpayers will be happier that this new revenue will used for SMEs. And, as more and more small businesses use crowdfunding, more and more people will become stakeholders in the businesses of the future.Closing Loopholes
Although Panama will remain the ‘official’ residence for tax-dodgers everywhere, the UK government will close a VAT loophole used by overseas internet merchandisers, improving competitiveness for small firms. A small victory is still a victory…Business Rate Relief
Business rate relief will double to £15k – exempting 600,000 small businesses from paying any rates at all.
From 2018, Class 2 National Insurance will be abolished altogether. The self-employed which make up a large proportion of startup teams, and indeed their many freelance workers, will be high-fiving as we speak.
Like (increasingly expensive) Marmite, any government’s decisions, particularly financial, are, well, loved or hated. But SMEs, startups and firms seeking to crowdfund, will have reason to be optimistic about the next financial year. Maybe they’ll celebrate by doubling their Xmas Toblerone stash to counteract the reduced size.
What did you make of the budget? Let us know on our social channels, or in a comment below.