Giving tax breaks to new small businesses when they start trading will help entrepreneurs to drive the economic recovery, a report has argued.
The report, compiled by the British Library Business & IP Centre, said start-ups should be exempt from tax for their first 18 months of existence – or until they grow to a certain size – to encourage aspiring entrepreneurs while investment capital is in short supply.
This was one of 10 key findings in the report, which looked at how the government can support entrepreneurship in the UK, and how this in turn will drive future economic growth.
Doug Richard, former BBC Dragon and a contributor to the report, argued that tax relief is the best way to incentivise aspiring entrepreneurs.
He said: “If the government is serious about encouraging enterprise in the UK, they need to avoid gimmicks like the VAT cut, and offer start-ups a genuine exemption from tax for at least 18 months while they get up and running.”
The report was timed to mark the launch of Global Entrepreneurship week (November 16-22). Other proposals included more centralised business support services; incentives to encourage socially responsible businesses and faster broadband speeds.
Denise Nurse, IP lawyer and co-director of Halebury solicitors, added that small businesses need a fast-track scheme to help them protect their intellectual property.
She said: “To help entrepreneurs protect their ideas government should consider introducing a fast-track scheme for small business fighting infringement, or back a UK-wide insurance scheme.”
© Crimson Business Ltd. 2009