Government support for small businesses

A guide to government support for small businesses

Starting or growing a business is very challenging, so it’s natural for entrepreneurs to tap into all the help they can find. But many businesses seeking help become confused by the vast number of government support initiatives and eventually give up looking for help.

In this article, we point businesses towards the important sources of government help available and describe what they do and how you can access them.

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 & 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, 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. It provides signposting, diagnostic support and business improvement guidance to pre-starts, startups and existing businesses. The service provides national information, which all businesses need, plus information, guidance and signposting to local support.

There’s a call-back service offering more in-depth support for businesses that have immediate or complex needs or may be at risk. This is run through a small team of experienced Business Support Advisors. They offer up to 60 minutes of free telephone business support, tailored to the individual business needs.

Businesses can call 0300 456 3565 to speak to a business support advisor (9.00am – 6.00pm Monday to Friday). Businesses can also ask questions through @businessgov using #BusinessSupportHelpline.

3. Local help for business

The Government has created a network of local Growth Hubs, which join up and deliver local business support. You can find your local growth hub by using the growth hub finder.

There are 38 Growth Hubs across the country, one for every Local Enterprise Partnership. These are a single local access point for all public and private sector business support, effectively a ‘front end’ for LEP programmes and other economic support.

Growth Hub partners include chambers of commerce, the Federation of Small Businesses, business schools, Enterprise Zones and banks.

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 24 months, you could be eligible. You must be aged 18-plus, based in the UK and be a UK resident.

It also provides advice and mentoring. The scheme has so far supported over 50,000 business ideas with more than £350 million worth of loans.

Investment

There are regional grants that support growth through capital investment and job creation – location can play a key part:

  • The location of your business may increase your chances of securing a grant. You may be eligible for support if you’re starting a business in an economically disadvantaged area, especially if it’s one with high unemployment.
  • Local support (e.g. subsidised rent and rates) is often available to encourage small businesses to start up in particular areas.

New Enterprise Allowance

If you’re looking to start your own business or develop a business if you’re already self-employed, you could be eligible for a grant and get mentoring to help you launch through New Enterprise Allowance.

Grants are offered in the form of a weekly allowance over a 26-week period and you may be eligible 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 can access information and advice on this from your Jobcentre Plus work coach.

5. Training

Employer-led apprenticeship reforms continue to improve the quality of apprenticeships.

  • The National Apprenticeship Service gives advice to employers on how to employ an apprentice.
  • The government introduced changes to apprenticeships funding in April 2017, with a new Apprenticeships Levy now payable by organisations with a salary bill of over £3 million per year.
  • Those with a salary bill of less than £3 million don’t pay the levy and instead share the cost of training and assessing their apprentices with the government – this is called ‘co-investment’. These small businesses pay 10% towards the cost of apprenticeship training and the government then pays the remaining 90%, up to the funding band maximum.
  • There are two different types of apprenticeships to choose from: apprenticeship standards (each one of these covers a specific occupation and sets out the core skills, knowledge and behaviours an apprentice will need); and apprenticeship frameworks (which are a series of work-related vocational and professional qualifications, with workplace and classroom-based training).
  • Use the Find apprenticeship training service to select an approved apprenticeship training provider.

6. Tax reliefs

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

  • Annual investment allowance: if you need to buy assets that can be classed as machinery and plant (that aren’t cars), you can claim tax relief on the full value of these items in the first year of purchase. The criteria are 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 they don’t count towards your annual investment allowance. Also, if you use energy saving equipment, such as cars that have low CO2 emissions, water-saving equipment or other products that save energy, 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 £3,000 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 £3,000 allowance has been used up or the tax year ends (whichever comes sooner). You can’t claim if you only have one employee.
  • Entrepreneur’s 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 a lower rate of corporation tax on profits earned. Only certain patents are eligible, so it’s worth checking if you qualify.
  • R&D tax credits: these allow you to claim back a significant amount of your development costs back, so if your business does a lot of this then it’s worth investigating.
  • Seed Enterprise Investment Scheme (SEIS): if you’ve been trading for less than two years and have less than £200,000 of assets, you can use this scheme to incentivise potential investors to fund your growth. It’s designed to help companies raise money by offering tax reliefs to individual investors who buy new shares in your company. You can receive a maximum of £150,000 investment through SEIS, on which your investors can claim relief, but conditions do apply so check the guidance carefully to ensure your investors will be eligible.

Your chartered accountant will be able to advise on the schemes that may be available to your business.

5. 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, and covers a wide range of arts-related activities.

It offers grants from £1,000 to £100,000 as part of a rolling programme with no deadlines. Decisions for applications of £15,000 or less take six weeks, but if you’re applying for more than £15,000 it takes 12 weeks.

Department for International Trade

Provides advice on export capability and opportunities, contacts in overseas markets, arranging overseas visits, ecommerce, export training and market research. Find out more.

Design Council Spark

The Design Council is an independent charity and the government’s advisor on design. The Design Council Spark is a support and funding programme that helps startups develop their product ideas. This year’s programme is now closed but you can register your interest for next year here.

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.

It supports research, development and demonstration projects through four broad sector-based programmes:

  • Emerging and Enabling Technologies
  • Health and Life Sciences
  • Infrastructure Systems
  • Manufacturing and Materials

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.

It also supports networks to connect partners to promote knowledge sharing. Search for live funding competitions online here.

Intellectual Property Office (IPO)

Provides services such as workshops for SMEs, IP awareness raising and online assessment tools. It also trains independent business advisers as IP auditors so that they can advise SMEs on IP issues. Find out more.

The IPO has also produced a handy booklet, Business Support for SMEs: Maximising the Value of Intellectual Property.

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 a detail that needs changing.

Gina Jones

Gina Jones

Journalist, IDM qualified social media practitioner and digital marketing expert with over a decade of experience creating content and social media strategies for a wide range of clients from SMEs to FMCGs.

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