THE government is being urged to establish a tax-free ISA wrapper to support small businesses.
Aldermore is calling for the establishment of an entrepreneur ISA that could follow a a similar model to the Help to Buy ISA (HISA) but rather than allowing money to be put aside tax-free for a property deposit, it could be used to launch a business.
Similar to the HISA, the government would also pay a 25 per cent matched bonus on contributions worth up to £3,000.
The bank is also calling for a small business savings allowance that would let sole traders, limited companies and partnerships earn up to £4,000 of income from savings, tax-free per year.
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A poll by the lender found 40 per cent of those already running a business say they would find an Entrepreneur ISA attractive.
Overall, 63 per cent thought the government should provide more support to help people run their own business, while this number increases marginally to 68 per cent among those who are currently self-employed.
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“Britain’s small business community is not only hard-working and diverse, but it is growing significantly,” Ewan Edwards, head of savings for Aldermore, said.
“There are now more than 5m small- and medium-sized enterprises (SMEs), who contribute a huge amount to the UK economy.
“SMEs take significant risk in setting up their own businesses, yet often the rewards are relatively small.
“Working with the government, we would like the chancellor to use the Budget to consider ways of improving existing fiscal support offered to SMEs.”
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