Business leaders in the South West have responded to the Chancellor’s Autumn Budget, with some calling it the most positive budget in years – however, others felt it didn’t go far enough in terms of supporting business.
Philip Hammond declared that “the era of austerity is finally coming to an end” and highlighted better than expected GDP growth for the UK.
But local accountancy firm Milsted Langdon said small businesses had expected more.
Rob Chedzoy, Tax Partner at Milsted Langdon, said: “What with the difficulties and uncertainties of Brexit and the importance that small to medium-sized businesses (SMEs) play within the wider economic picture for the UK, we would have hoped to see more measures to support their growth, but the Budget was certainly lacking in this area.”
Rob said business owners would, for instance, see the qualifying period for Entrepreneurs’ Relief extended from one to two years, which will generate an additional £90m by 2023/24 for the treasury and affect businesses’ tax planning opportunities.
“The National Living Wage, in particular, will rise to £8.21 from April 2019 – an increase of 4.9 per cent,” said Rob. “Whilst positive for employees, this will have an immediate impact on many employers’ wage and workplace pension bills.”
Rob said that smaller giveaways, such as placing a freeze on the VAT threshold and fuel duty and the increase in the Annual Investment Allowance, from £200,000 to £1m over the next two years, would help businesses, but the measures didn’t go far enough.
Adam Rainey, regional director for the South West at Lloyds Bank Commercial Banking, said the plan to cut business rates by a third for retailers with a rateable value of £51,000 or less would be a huge help.
He said: “This could prove to be a lifeline for many stores in the region’s high streets, helping create a better environment for business growth and freeing up cash to invest in new opportunities.”
Richard Mathews, chief executive of Optimum Professional Services, which offers accountancy and legal services in Swindon, said it was good to hear that the increases in personal allowance and higher rate tax were being introduced a year early.
He said: “We’re also pleased that stamp duty relief for first-time buyers is being extended, and backdated, to those in shared ownership. Help with business rates, freezing the VAT threshold, raising the annual investment allowance and freezing duties are all good news.
“But the Chancellor said nothing about pensions or about National Insurance, and I find that silence a bit worrying. As ever, the devil will be in the detail.”