Family Businesses Will React to Replacement of Grants with Loans, Says KPMG
26th November 2015
Commenting on how the Autumn Statement will affect family businesses, Gary Deans, KPMG’s Head of Family Business, says:
“The proposal that innovation grants will be replaced by repayable loans may have a more pronounced impact on family businesses than other SMEs.
“There is a certain psychology attached to indebtedness, rather than the incentivisation attached to grant funding. Many family businesses have historically avoided reliance on debt so I expect they will react to this change. It could prove to be a false economy, given the importance of innovation to economic growth.
“Another, albeit pre announced, cost facing a significant number of family businesses is the apprenticeship levy which will add 0.5% to the wage costs of employers with a payroll exceeding £3million. Will this lead to pressure to keep wage bills down or might it limit the number of roles available for apprentices when their training is completed?
“Some sectors have of course done better than others as the Chancellor announced (again) funding for small house builders, many of which are family concerns. The integral role they play in the supply chain in order to get these new homes built is clearly recognised.
“Though it is evident the government is seeking to create a supportive ecosystem for business, there was nothing in the Chancellor’s statement today that leaves family owned enterprises with anything real to celebrate.”
Follow Gary on Twitter @gary_deans