Mar 22, 2012

Budget contains some good news for start-ups

Certain announcements in the recent budget have given start-ups a reason to cheer. This includes the ATL (above the line) research and development tax credit, which they feel can give jobs and exports a boost.

This credit for R&D, which will be applicable from April 2013, comes with a minimum rate of 9.1 per cent before tax. A payable credit can be claimed by companies that are under a loss.

More details about the R&D credit will be finalized after the budget, and the final rates along with the payable credit will be decided.

SocialGO, a service helping people start their own social networks, has used R&D tax credits in the past. The company's chairman Dominic Wheatley says that tax credits like these are welcome. With the reduced costs of employment, start-ups can create more jobs, and market as well as export more products. Basically, such initiatives can offer benefits on many levels.

Another budget announcement was the suggested improvement to the EMI (Enterprise Management Incentive) scheme, by doubling the individual grant limit to £250,000. The scheme was established to help SMEs hire and retain talent. As part of the changes, the government is also exploring the option of including academics hired by start-ups, under the scheme.

The government also plans to introduce a program that makes enterprise loans available to young people who want to establish and grow their businesses. The pilot scheme is set to be launched later this year. However, start-ups are looking at the proposed scheme much like they do for any government financing program - with apprehension. This is given the fact that most of these schemes offer little benefit as banks still do not lend to companies as they consider it to be risky. 


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