YESTERDAY’S Budget announcement by Chancellor Rishi Sunak has opened the floodgates: comment is flooding in to BV.
Here we list some of the most recent comments, edited for space reasons…
Luke Hamm, CEO of GovGrant, says the announcement in the Budget of the formation of eight freeports is a positive move for the levelling-up agenda.
“Addressing this in some way was desperately needed. The introduction of eight freeports is welcome, giving tax relief and investment in regions that need it most, while also providing a great springboard for UK economic recovery as a whole.
“HMRC’s Patent Box data shows the clear funding gap between the North and South – in 2018-19, about £690m was claimed by SMEs across London and the South East, compared to just £50 million in the North East. While many companies are headquartered in London, accounting for some of that allocation, the difference is still stark.”
Simon Hodgson, head of Public Policy at Unum, commented on the decision to include the closure of the current SSP rebate scheme.
“The closure of the current rebate scheme could create uncertainty for businesses about how best to support employees who need to take time off sick or self-isolate. In fact, last year, the UK was reported to have the lowest mandatory rate of paid sick pay compared to all other OECD countries.
“More importantly, it highlights the urgent need for a comprehensive look at financial protection for ill or injured staff, across all industries, going forward. Indeed, the pandemic has highlighted just how vital it is to find a better way to drive up business investment in workplace health, support employees facing income shocks, and address the problem of ill health at work, which all cost our economy more than £100bn each year, even before the global virus took hold.”
Finn Houlihan, MD at The Arlo Group, said: “The decision to freeze a range of thresholds from next year, including for income tax and Capital Gains Tax (CGT), has set a timeline for consumers to get their tax affairs in order. While the Chancellor has not made some of the expected changes to CGT rates and allowances today, we could likely see further changes announced to these taxes in five years’ time.
“Ultimately, this means consumers have a window of opportunity to reduce any capital gains and they should consider taking steps such as making the most of their annual allowances over the next five years.”
Mark Smith, partner at Innovation Incentives in Ayming, UK, said: “Once again, the intention to become an innovation powerhouse was prominent in this year’s Budget. It’s great to see the recognition that innovation is important despite fiscal tightening so, from an R&D perspective, the message was promising.
“The Chancellor expressed that the government wants to make the UK the best place in the world for companies to innovate and his decision to consult the industry on R&D schemes is a wise one and something we have recommended to HMRC.
“How generous are the schemes? How easy are applications? We need to analyse all aspects of our scheme to make it as attractive as possible. For example, we don’t agree that capping the possible R&D tax credits at £20,000 for SMEs is a sensible decision…
“We should incorporate costs of certain technology, such as cloud computing and data use, into R&D schemes. The cost rules were written 20 years ago. Why wait to make this change?”
Seán Kemple, MD at Close Brothers Motor Finance, commented: “Car dealers across the UK will be impacted by the Chancellor’s decision to raise corporation tax from 19 percent to 25 percent from 2023.
“It’s been a difficult year for dealers, who have had to navigate through showroom closures and a surge in digitalisation, all while facing production delays that have limited stock availability. Increased tax will put more pressure on bottom lines, so the government will need to provide proper support and communication for those struggling.
“Continuing the business rates holiday will help, and go some way to supporting car dealers across the country. The industry is vital to the economy.”
Radeep Mathew, head of Consulting at innovation funding firm Leyton, said the Chancellor “signalled a return to the more complex Corporation Tax regimes of old”, seeking to tax the larger companies that have generally fared well throughout the pandemic. “The top-line increase in corporation tax from 19 percent to 25 percent is a significant jump given the need for business-driven economic growth over the coming years and will certainly have an impact on the outlook for larger businesses all over the UK.
“The UK will continue to have one of the lowest rates of the G7 countries, and it is especially welcome to see that smaller businesses, which form the backbone of the UK economy, will continue to pay the current rate of 19 percent.
“Cashflow has been a significant burden for businesses up and down the country, but the announcement on business rates and VAT as well as the extension of the furlough scheme will provide confidence among businesses that they can weather the storms of uncertainty over the coming months.”