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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 January 2023.

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 enquiries@businesssupporthelpline.org.  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. 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 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 also 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.

Recovery Loan Scheme

The Recovery Loan Scheme is available to small and medium sized enterprises to help access loans and financial support. Up to £2 million (£1 million for Northern Ireland) is now available per business. 

Finance through this scheme can be used for any legitimate business purpose, including working capital or investment.

The government guarantees 70% of the finance to the lender. As the borrower, you are always 100% liable for the debt. The loans are available through a network of accredited lenders, which are listed on the British Business Bank’s website.

To be eligible for the recovery loan scheme, your business must be trading in the UK and have a turnover of £45 million or less. You will also need to show that your business is viable and not in difficulty.

There are several business sectors that are not eligible for the scheme, including banks, building societies, insurers, public sector bodies and state-funded schools.

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.

You can find your local enterprise zone here.

Gigabit Broadband Voucher Scheme

The Gigabit Broadband Voucher Scheme provides up to £4,500 for businesses that are struggling with slow broadband speeds in rural areas. 

Gigabit vouchers can be used by homes and businesses to go towards the cost of installing gigabit-capable broadband connections. To be eligible, homes and businesses in rural locations must meet the following criteria when part of a group project:

  • An existing broadband speed of less than 100Mbps
  • You live in an area where a gigabit capable network isn’t going to be built in the near future
  • There is no government-funded contract planned or in place to improve the network already

Single connections are not eligible for this scheme.

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. 

UK Tradeshow Programme

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.

Small Business Commissioner

The Small Business Commissioner (OSBC) was set up by the government to help small businesses tackle late payment and unfavourable payment practices in the private sector. 

The scheme covers the entire UK and has so far managed to retrieve over £8 million in unpaid invoices for small businesses to date.

5. 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.

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.

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 are electric or have zero CO2 emissions – you can claim “enhanced capital allowances”.

You can claim 100% first year allowances in addition to annual investment allowance (AIA), as long as you do not claim both for the same expenditure. To get capital allowance, you must claim it on your tax return.

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

Businesses can reduce their National Insurance bill by up to £5,000 by claiming this. You 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). 

Businesses can’t claim employment allowance 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 the lower rate of corporation tax (10%) 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. 

For expenditure on or after 1 April 2023, the Research and Development Expenditure Credit (RDEC) rate will increase from 13% to 20%, the SME additional deduction will decrease from 130% to 86% and the small and medium (SME) sized company credit rate will decrease from 14.5% to 10%.

Learn more about the recent reforms to R&D tax reliefs here.

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.

6. 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

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.

Be the Business

Be the Business provides free targeted support and guidance for UK business leaders, including guides, action plans, tools and templates, business stories and mentoring support

Tech Nation

Tech Nation provides programmes to support UK tech businesses, as well as access to free online courses to build digital skills.

For more information on funding that you can get for your startup, read our article about getting money to start a business.

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

Mia Musa-Green

Mia Musa-Green

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