IMPORTANCE AND ROLE OF SMES IN THE UK ECONOMY
SMEs make up around 99.9 per cent of all businesses in the UK, so are enormously important to the UK economy and play a key role in boosting productivity. They are often referred to as the “backbone” of the British economy. Millions of people work in SMEs – which are a key driver of economic sustainability, growth and expansion. It is estimated they contribute about 47% to the UK economy and about 60% of all private sector jobs.
Grants typically mirror national policy imperatives such as the drive to clean growth and net zero, energy efficiency, etc. A current example of this is the millions of pounds being made available to help businesses weather the storm of the Covid-19 pandemic, so to build resilience, and aid post-pandemic recovery.
WHAT IS AN SME IN THE UK?
In the UK, sections 382 and 465 of the Companies Act 2006 define a SME for the purpose of accounting requirements. According to this a small company is one that has a turnover of not more than £6.5 million, a balance sheet total of not more than £3.26 million and not more than 50 employees. A medium-sized company has a turnover of not more than £25.9 million, a balance sheet total of not more than £12.9 million and not more than 250 employees.
Within this umbrella there are three different categories: medium-sized, small, and micro-businesses. These categories are defined by turnover and number of employees.