Government support for small businesses

A guide to government support for small businesses

Starting or growing a business is incredibly challenging. Fortunately, the government has a whole host of advice, support and funding for SMEs. Understanding and accessing it, however, is easier said than done.

In this article, we’ve rounded up the most important government help out there into one handy guide. Here, you’ll learn exactly what support is available to SMEs – at a national and local level – and find exactly how and where to access it.

This post was updated in April 2021.

1. GOV.UK website

GOV.UK is a single point of access to all government services and information. It provides information and guidance on starting and running a business, including statutory rights and obligations, and the ability to search for support using the business finance and support finder.

The business finance and support finder is an interactive tool which is searchable by sector, business size, location, activity and business stage. It allows businesses to search for government-backed support and finance, including:

  • Grants, finance and loans
  • Business support e.g. mentoring or consultancy
  • Funding for small and medium-sized businesses and startups

The website also has information on:

  • Employing people
  • Money and tax
  • Business and self-employment

2. National Business Support Helpline

The Business Support Helpline is a key element of the government’s business support provision. 

The service provides advice, support, funding and business improvement guidance to pre-starts, startups and existing businesses. The helpline shares essential national information and signposting to local support.

Businesses can call 0800 998 1098 to speak to a business support advisor (9.00am – 6.00pm Monday to Friday) or email enquiries@businesssupporthelpline.org.  Businesses can also ask questions through their LiveChat or connect on Twitter, Facebook and YouTube.

3. Local help for business

There are 38 growth hubs across the country, one for every Local Enterprise Partnership (LEP). 

Businesses can connect with their local growth hub to access funding, advice and support. 

LEPs are business-led partnerships between local authorities and local private sector businesses. They aim to drive economic growth and job creation, as well as upskill the workforce and improve infrastructure.

4. Coronavirus support

A range of financial support became available during the coronavirus outbreak, some of which is still accessible.

Coronavirus Job Retention Scheme

The Coronavirus Job Retention Scheme (CJRS) has been set up for businesses that have staff, including apprentices, that would otherwise have to be laid off due to the Covid-19 outbreak. 

The CJRS will pay up to 80% of an employee’s salary, up to a maximum of £2,500 a month. The CJRS has now been extended until 30 September 2021. However, from July 2021, the level of grant will be reduced and employers will be asked to contribute towards the cost of furloughed employees’ wages. 

Restart Grants

The Restart Grant scheme supports businesses in the non-essential retail, hospitality, leisure, personal care and accommodation sectors with a one-off grant, to reopen safely as Covid-19 restrictions are lifted.

Eligible businesses in the non-essential retail sector may be entitled to a one-off cash grant of up to £6,000 from their local council. Eligible businesses in the hospitality, accommodation, leisure, personal care and gym sectors may be entitled to a one-off cash grant of up to £18,000 from their local council.

Recovery Loan Scheme

The Recovery Loan Scheme has been set up to help businesses of any size access loans and financial support. Up to £10 million is available per business. 

The government guarantees 80% of the finance to the lender. As the borrower, you are always 100% liable for the debt. The scheme is open until 31 December 2021.

Business rates holiday and discounts 

The government is offering business rates holiday and discounts for tax year 2021-22 for all retail, leisure and hospitality businesses, in response to the Covid-19 outbreak.

5. Financial support

Start Up Loans Company

The Start Up Loans Company is a subsidiary of the British Business Bank and funds loans of up to £25,000.

If you have a great business idea or you’ve been trading for less than 24 months, you could be eligible. Successful applicants get free mentoring for 12 months. The loans can be repaid over one to five years. You must be aged 18-plus, based in the UK and be a UK resident.

The scheme has supported over 75,000 businesses with more than £623 million worth of loans.

Seed Enterprise Investment Scheme 

The Seed Enterprise Investment Scheme (SEIS) is designed to help businesses raise up to £150,000 worth of investment.

If you’ve been trading for less than two years and have less than £200,000 of assets, you can use SEIS to incentivise potential investors to fund your growth. The scheme is designed to help companies raise money by offering tax reliefs to individual investors who buy new shares in your company.

There are various rules you must follow so your investors can claim and keep SEIS tax reliefs relating to their shares. Before you apply, check the guidance carefully. 

Enterprise Investment Scheme

The Enterprise Investment Scheme (EIS) enables businesses to raise up to £5 million each year, and a maximum of £12 million in your company’s lifetime. 

Like SEIS, this is a venture capital scheme designed to help companies raise money by offering tax reliefs to individual investors who buy new shares in your company. EIS, however, is geared towards more established businesses.

Businesses must not have gross assets worth more than £15 million before any shares are issued and not more than £16 million immediately afterwards. Companies must have less than 250 full-time equivalent employees.

Again, check the guidance carefully. There are various rules you must follow so your investors can claim and keep EIS tax reliefs relating to their shares.

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New Enterprise Allowance

If you’re over 18 and either you or your partner receive benefits (e.g. Universal Credit, Jobseeker’s Allowance or Employment and Support Allowance), you may qualify for New Enterprise Allowance. This can help you to start your own business or develop your business if you’re already self-employed. 

As part of this scheme, you’ll get a mentor who will give you advice and support to help you get set up and start trading. Once you’ve made a business plan with your mentor, you could be eligible for weekly grants of up to £1,274 over 26 weeks and can apply for a loan to help with startup costs.

You can access information and advice on this from your Jobcentre Plus work coach.

Kickstart Scheme

The Kickstart Scheme provides funding to create new jobs for 16 to 24 year-olds on Universal Credit who are at risk of long-term unemployment. Employers of all sizes can apply for funding which covers:

  • 100% of the National Minimum Wage (or the National Living Wage depending on the age of the participant) for 25 hours per week for a total of six months
  • Associated employer National Insurance contributions
  • Any relevant workplace pension contributions (automatic enrolment)

Enterprise Zones

Enterprise Zones are designated areas across England that provide tax breaks and government support to new and expanding businesses.

Businesses located within an Enterprise Zone can access benefits such as 100% business rate discounts up to £275,000 over a five-year period or 100% enhanced capital allowances (tax relief) to help firms make large investments.

Businesses can also access simplified local authority planning – Local Development Orders grant automatic planning permission for certain development (such as new industrial buildings or changing how existing buildings are used) within specified areas.

SME Brexit Support Fund

The SME Brexit Support Fund offers grants of up to £2,000 to help with training or professional advice, if your business has up to 500 employees and no more than £100 million annual turnover.       

Gigabit Broadband Voucher Scheme

The Gigabit Broadband Voucher Scheme provides up to £3,500 for businesses that are struggling with slow broadband speeds in rural areas. 

Gigabit vouchers can be used by small businesses to go towards the cost of installing gigabit-capable broadband connections. To be eligible, businesses must have up to 249 employees and annual turnover no greater than £36 million.

Apprenticeships

Businesses of all sizes in many different sectors can benefit from hiring an apprentice. If your annual pay bill is less than £3 million per year, the government will pay up to 95% of the training costs and assessment costs. 

6. Tax reliefs

The government offers support to small businesses through a number of schemes to reduce tax liabilities, including:

Annual investment allowance (AIA)

If you need to buy assets that can be classed as plant and machinery (excluding cars), you can claim tax relief on the full value of these items in the first year of purchase. The criteria is stringent, so it’s worth checking if you qualify and also remember you may need to pay tax if you sell the item after claiming it. 

Capital allowance

If you buy an asset that qualifies for first year allowances, you can deduct the full cost from your profits before tax and it doesn’t count towards your annual investment allowance. If you use energy-saving equipment – such as cars that have low CO2 emissions – you can claim “enhanced capital allowances”.

Creative industry tax reliefs

If your business contributes to the creative industry, you may be eligible for one of eight corporation tax reliefs that allow companies to claim a larger deduction or, in some circumstances, claim a payable tax credit when calculating your taxable profits. Find out if your business qualifies.

Employment allowance

You could reduce your National Insurance bill by up to £4,000 by claiming this. You can claim it each month when you do your payroll, which means that no National Insurance contributions are payable until your £4,000 allowance has been used up or the tax year ends (whichever comes sooner). You can’t claim if you only have one employee.

Business Asset Disposal Relief

If you’re selling all or part of your business, this scheme allows you to pay only 10% Capital Gains Tax on any qualifying assets.

Patent box 

If your company is liable to pay corporation tax and makes a profit from patented inventions, you may be able to apply for corporation tax on profits earned. Only certain patents are eligible, so it’s worth checking if you qualify.

R&D tax credits 

Research and Development (R&D) is a tax relief that can either reduce a company’s tax bill or provide a cash sum. It’s based on how much a company spends on R&D and specifically looks at projects that are trying to advance science or technology. 

Business rates relief

You can get business rates relief if your property’s rateable value is less than £15,000 or your business only uses one property (though you may still be eligible if you use more). You’ll need to contact your local council to apply for small business rate relief.

7. National business support programmes

Arts Council England

The Arts Council Grant Scheme is aimed at organisations undertaking creative projects as part of their primary activity. It’s open to individuals as well as organisations, libraries and galleries.

The funding finder is regularly updated with new funds and programmes.

Department for International Trade

The Department for International Trade’s export hub provides advice and training on selling overseas, from finding target markets to contacting suppliers. Visit the export hub.

Design Council Spark

The Design Council is an independent charity that works in the public interest. The Design Council Spark is a support and funding programme that helps startups develop their product ideas. 

Innovate UK

Innovate UK is part of UK Research and Innovation, a non-departmental public body funded by a grant-in-aid from the UK government. It provides funding to support R&D and innovation activity to organisations across the UK, mainly through web-based competitions.

Businesses can apply for funding to test the feasibility of an idea, research and develop it and demonstrate it in a prototype. All of the current and forthcoming funding competitions run by Innovate UK are published here.

Innovate UK also offers a Knowledge Transfer Network to provide business owners with markets and finance to improve their companies.

Intellectual Property Office (IPO)

The Intellectual Property Office provides information on things like trademarks, patenting and copyright. It also trains independent business advisers as IP auditors so they can advise SMEs on IP issues. The IPO has a range of online training tools.

Mentors ME

An online resource for small and medium-sized businesses that offers access to around 15,000 trained volunteer business mentors. Find out more and sign up online.

We endeavour to keep this guide up to date. Please email chris@thepitch.uk if you spot something that needs updating.

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Mia Musa-Green

Mia Musa-Green

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