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 May 2022.
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 in England can call 0800 998 1098 to speak to a business support advisor (9.00am – 6.00pm Monday to Friday) or email email@example.com. Businesses can also ask questions through their LiveChat or connect on Twitter, Facebook and YouTube.
Details vary for Scotland, Wales, and Northern Ireland.
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.
Recovery Loan Scheme
In the Autumn of 2021, the Chancellor announced that, although the Recovery Loan Scheme will be extended, changes will come into force from 1 January 2022.
The Recovery Loan Scheme is now only available to small and medium sized enterprises, to help access loans and financial support. Up to £2 million is now available per business.
The government guarantees 70% of the finance to the lender. As the borrower, you are always 100% liable for the debt. The scheme has been extended until 30 June 2022.
The Recovery Loan Scheme is now the only Covid-19 financial support still available and open for applications as of May 2022.
5. Financial support
Start Up Loans Company
If you have a great business idea or you’ve been trading for less than 36 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 90,000 businesses with more than £800 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.
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.
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, and/or an annual balance sheet total not exceeding £18 million.
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.
UK businesses that are currently exporting can apply for support to exhibit at or attend approved overseas trade shows and conferences, and/or potentially receive grants to cover some costs.
You can also apply for support if you’re thinking about exporting but are not currently doing so.
6. Tax reliefs
The government offers support to small businesses through a number of schemes to reduce tax liabilities, including:
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.
There is a temporary increase in the limit of the annual investment allowance (AIA) from £200,000 to £1,000,000 for qualifying expenditure on plant and machinery incurred during the period from 1 January 2022 to 31 March 2023.
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 are electric or have zero CO2 emissions – you can claim “enhanced capital allowances”.
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.
You could reduce your National Insurance bill by up to £5,000 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 £5,000 allowance has been used up or the tax year ends (whichever comes sooner). You can’t claim if you only have one employee.
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.
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.
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.
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.
Find any open funds here.
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.
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.
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 firstname.lastname@example.org if you spot something that needs updating.