The British Business Bank has launched the Growth Guarantee Scheme to help smaller businesses access finance.

The Growth Guarantee Scheme is the successor to the Recovery Loan Scheme and is expected to support around 11,000 smaller businesses.

The British Business Bank has so far accredited 41 lenders for the scheme which will run until March 2026.

The scheme supports term loans, overdrafts, asset finance, invoice finance and asset-based lending facilities. Not all lenders will be able to offer all products.

Minimum facility sizes start at £1,000 for asset finance, invoice finance and asset-based lending and £25,001 for term loans and overdrafts. The maximum facility sizes are up to £2 million per business.

Martin McTague, National Chair of the Federation of Small Businesses (FSB) said:

‘We are delighted that the British Business Bank has officially launched the Growth Guarantee Scheme, to get much-needed finance to start-ups and scale-ups, so they can grow.

‘The new scheme will help small firms get the funding they require to be able to achieve their dreams.

‘The Growth Guarantee Scheme will be an important part of the funding landscape for small firms, whose growth will be an indispensable ingredient in overall economic recovery in the UK.’

Internet link: British Business Bank website FSB website

HMRC will send Simple Assessment tax statements to pensioners in the next few weeks.

The combination of frozen tax thresholds and a substantial increase to the state pension has led to many more pensioners being dragged into paying income tax for the first time.

The last government froze the personal allowance at £12,570 until 2028.

The full new state pension saw a 10% increase in April 2023 to over £10,600 annually, followed by another 8.5% rise in April 2024, taking it to more than £11,500 per year.

HMRC says that pensioners will receive a Simple Assessment where there is an underpayment of income tax for a tax year that cannot be collected automatically via PAYE and they are not subject to income tax self assessment.

An underpayment of income tax can result from:

• pensioners who receive income from the State Pension, occupational pensions, employment pensions, and most taxable state benefits
• pensioners with up to £10,000 of untaxed income (for example, from savings or investments).

HMRC will use the information it already holds and information supplied from banks and building societies about people’s income and tax situation.

The tax authority will calculate any tax owed or refund due and the Simple Assessment tax statement will show the calculation.

HMRC says taxpayers will need to check that their Simple Assessment statements are correct before paying any tax due.

Please contact us for advice on Simple Assessment matters.

Internet links: GOV.UK

The UK’s economic recovery is finally putting ‘down roots’ after GDP grew faster than expected in May, says the Confederation of British Industry (CBI).

The UK economy expanded by 0.4% in May, rebounding from zero growth in April, according to the Office for National Statistics (ONS).

The growth figures were helped by a strong performance from retailers and the construction industry, added the ONS.

Ben Jones, CBI Lead Economist, said:

‘The latest data shows that the UK’s economic recovery is starting to put down roots. While growth in May was driven by a rebound in sectors such as retail and construction, which were hit by poor weather earlier in the spring, recent months have seen activity creeping up across a wide range of sectors.

‘The new Labour government will benefit from some economic tailwinds going forward, with consumer confidence rising as lower inflation and strong wage gains support household incomes. However, many firms remain cautious about the near-term outlook.

‘While the outcome of the election will help dispel some of the recent uncertainty, it could take a turning of the interest rate cycle for the recovery to really bed in.

‘The new government’s focus on making growth a priority is welcome. However, to put the economy on a pathway to long-term, sustainable growth, we need to see concrete actions to deliver that vision within the next 100 days.’

Internet links: ONS website CBI website

Chancellor of the Exchequer Rachel Reeves said she was taking difficult decisions after a Treasury spending audit revealed £22 billion of unfunded pledges.

Ms Reeves confirmed that the Autumn Budget will take place on 30 October.

In a statement to Parliament, the Chancellor made a number of announcements but said there would be more to come on tax and spending plans at the Budget.

The Chancellor said that she has inherited a £22 billion hole in the public finances and said urgent work is required to reduce the pressure on finances by £5.5 billion this year and over £8 billion next year.

Ms Reeves announced that the government will cut Winter Fuel Payments to those not in receipt of pension credits or other benefits.

The Chancellor announced a number of immediate savings, including:

• £800 million this year and £1.4 billion next year from scrapping the Rwanda migration partnership and scrapping retrospection of the Illegal Migration Act.
• £70 million this year by cancelling the Investment Opportunity Fund and other small projects.
• £185 million next year from cancelling the Advanced British Standard.
• £785 million next year from stopping unaffordable road and railway schemes.

Ms Reeves also outlined the next steps in delivering tax commitments from Labour’s election manifesto.

This includes ending the VAT tax breaks for private schools from 1 January 2025 to help recruit 6,500 new teachers, as well as replacing the non-domicile regime with a new internationally competitive residence-based regime.

The Chancellor said:

‘This is not the statement I wanted to give today, and these are not the decisions I wanted to make. But they are the right decisions in difficult circumstances.’

Internet link: HM Treasury press release

The first King’s Speech since Labour’s victory in the General Election saw the new government pledge that securing economic growth would be its fundamental mission.

King Charles III delivered the 2024 King’s Speech at the State Opening of Parliament and announced plans to accelerate housebuilding and high-quality infrastructure through planning reform.

In the Speech, the government also pledged to:

• Reform the Apprenticeship Levy.
• Establish publicly owned Great British Energy.
• Bring train operators into public ownership.
• Remove the VAT exemption for private school fees.

Shevaun Haviland, Director General of the British Chambers of Commerce (BCC), said:

‘The government’s clear intention to speed up the planning system for large scale infrastructure can feed that business confidence, if it can be delivered. Measures to increase business resilience, reform of the apprenticeship levy and legislation to support sustainable aviation fuel could also boost the economy.

‘There are still big issues that need to be addressed. Improving our trade relationship with the EU will not be straightforward, and there will need to be detailed consultation with business on the Plan to Make Work Pay.

‘But there is much in today’s speech which shows the voice of business has been heard and that government is introducing measures that benefit firms and help unlock investment.?

‘We want to work in partnership with the government to make this happen and shift the economy out of first gear to get it motoring again.’

Internet links: GOV.UK BCC website