The Government recently unveiled their plans to reverse the proposed 1.25 percentage point increase to National Insurance (NI). This article looks at what this means for small businesses, and what additional grants and schemes are available to you across the UK.
What does the reversal mean for SMEs?
It’s estimated that by scrapping the NI rise, the average small business will save around £4,200 on bills next year. For many feeling the pressure over heightened costs, this will provide some welcome relief.
If your NI is calculated on a monthly basis, you will see the changes of the new government plan take effect from your first pay packet after 6 November 2022.
There are also various other UK government grants and schemes that are available to you to help tackle rising costs. Let’s walk through a few of those on offer.
Energy Bill Relief Scheme
The Energy Bill Relief Scheme is a government-funded discount on wholesale gas and electricity prices. It will be applied to energy usage for a six-month period beginning from 1 October 2022 and is expected to be at least half the wholesale prices that were expected this winter.
If you’re eligible, these discounts will be applied automatically to your bills so there is no need to contact your supplier directly.
This scheme is available for you if you are:
On existing fixed price contracts that were agreed on or after 1 April 2022
Signing new fixed-price contracts
On deemed / out-of-contract or variable tariffs
On flexible purchase or similar contracts
If your business has a focus on innovation or developing new products, services and ideas, then innovation grants are a great way to get the support you need to grow and scale up.
There are various funding bodies that offer financial backing and tailored support to small businesses looking to research and test new ideas, such as Innovate UK. They manage various types of funding opportunities called ‘competitions’. Each has its own eligibility criteria and scope, so check this before starting your application.
It’s also a good idea to regularly check the current and upcoming competitions run by Innovate UK to see which grants you can apply for.
R&D Tax Credits
These are tax reliefs for businesses looking to carry out research and development projects relating to the advancement of science or technology. It allows you to reduce your tax bill by claiming relief on aspects of the research project, such as employee and subcontractor costs.
Don’t worry if you think your business doesn’t strictly relate to R&D. HMRC uses a broad definition, meaning that if you’re developing a process or product to meet demand in an evolving market, you’ll likely qualify. The main criteria is that your business must have fewer than 500 staff, and either a turnover of less than €100 million (roughly £88 million) or a balance sheet total of under €86 million (roughly £75 million), according to the government.
The National Lottery Heritage Fund
This grant supports those who aim to protect and preserve their heritage and connect people and communities to their history and traditions. It ranges from support for environmental preservation projects to those focusing on the local community.
One of particular interest might be The Heritage Innovation Fund. These grants of up to £25,000 are available to all not-for-profit businesses looking to explore, test and grow the new ways of working that are needed for the future.
If you’re experiencing slow broadband speeds in rural areas, your business can apply for vouchers worth up to £3,500 to help cover the costs of installing new gigabit speed connections. This will enable you to access full-fibre broadband, meaning you can do more and sell more in your working day. A free broadband speed test enables you to check your current speed in just a few minutes.
You can apply for these vouchers if:
You have existing broadband speeds less than 100Mbps
A gigabit-capable network isn’t likely to be built to that area commercially in the near future
There is no government-funded contract planned or in place to improve the network already
Other useful information
Knowing how to apply for a small business grant can feel overwhelming. But, the good news is there are many different guides available to help you through the process.
For instance, check out Simply Business for some useful tips on the application process. Additionally, our small business tips on the Mettle blog contain further information on things like how to write a successful business plan, and how to get paid on time.
Lastly, always make sure to regularly check the Gov.UK website for news about upcoming schemes and grants, or other benefits that can provide you with support.