20 Feb 2014

Transforming today’s SMEs into tomorrow’s global leaders


The return of economic growth must be underpinned by solid foundations built on innovation, skills, exports and investment, the BVCA argues today in its 2014 Budget submission. In order to achieve this, companies with high-growth potential must be given the support and funding they require.

The Government has done much to encourage the success of small and medium-sized companies, both new and established, yet further steps need be taken to ensure the UK’s recovery is a balanced one and to transform the SMEs of today into tomorrow’s global leaders.

Key policy recommendations include:

Finance
  • Encourage more institutional investors to invest in small, growing companies through venture capital;
  • Encourage more large business to invest in smaller ones through corporate venture capital programmes by offering corporation tax relief and loss relief;
  • Reform Entrepreneurs Relief by abolishing the 5% threshold, the employment test and the £10m lifetime limit, to send a clear message to entrepreneurs that if they make a success of their business in the UK, they deserve to keep the proceeds for them and their team;
  • Ensure the take up of the social investment tax relief to encourage private investment in UK social enterprises.

Skills
  • Deliver an apprenticeship tax credit so employers can regain control over skills policy and make sure they get the people they need;
  • Local Enterprise Partnerships should gain greater control over the skills budget so they can work with local businesses to deliver regional employment strategies that are fit for purpose;
  • Visa restrictions should be lifted for non-European graduates who have studied a STEM subject (science, technology, engineering, and mathematics).

Innovation
  • Enhance Catapult Centres‘ support for early research phases to ensure that promising research moves closer to commercialisation;
  • Encourage university technology transfer offices by reintroducing the University Challenge Funds.


Notes to editor
  1. Around 90% of private equity and venture capital investment in the UK is directed at SMEs and ours is an industry which has a proven track record in helping businesses to grow and succeed.

  2. The British Private Equity & Venture Capital Association (BVCA) is the industry body for UK private equity and venture capital. The BVCA has over 500 member firms, representing the overwhelming number of UK-based private equity and venture capital firms and their advisers.


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