Businesses react to Autumn Budget 2018
Chancellor Philip Hammond announced his 'post-austerity' Budget, with tax cuts for individuals, improved spending on roads, and support for high street retailers.He also pledged funds for a proposed Eden 'Project for the North' and increased the Annual Investment Allowance to encourage company's to spend.
Here's what Lancashire businesses had to say:
Annual Investment Allowance increasedTony Medcalf, tax partner at MHA Moore and Smalley: “This was a budget where the chancellor looked to turn the heating back on after years of spending freezes. It was therefore a series of pragmatic funding announcements, rather than any grand vision.
“The chancellor sought to back up the prime minister’s ‘austerity is over’ message with spending announcements on road repairs, the NHS, social care, housing, schools and defence. In that sense it became a bit of a ‘sticking plaster’ budget for long-starved government departments.“However, the business community will welcome the increase in the annual investment allowance from £200,000 to £1m for two years. That should encourage greater capital investment from businesses in new infrastructure, plant and machinery.
“Small businesses will also welcome moves to lower the contribution towards the cost of apprenticeships, while high street retail businesses will benefit from immediate business rates relief reductions. On personal tax rates, the bringing forward to April 2019 of the proposed increases in the personal allowance for basic rate and higher rate tax payers was a surprise.”
Rate bills reducedJane Parry, managing partner at PM+M: "Today’s Budget was described by the Chancellor as one that ‘paved the way to a brighter future’ and that austerity is finally coming to an end. However, as we are still to secure a Brexit deal with our EU partners, I believe that it can only really be described as ‘steady as you go’ until that is actually sorted. We will also have to wait to see if his claim of a post-Brexit ‘double dividend’ comes to fruition. Let’s hope it does.
"From a North West point of view things are looking generally good. According to the NatWest North West PMI, IHS 2018 Report, the region is enjoying the strongest growth in the UK along with Wales; new business rose at the fastest pace; whilst the rate of job creation accelerated to make the North West the leading UK region."The news that for the next two years up to the next business rates revaluation, for all businesses with a rateable value of £51,000 or less, the government will cut their rate bills by one third. Whilst £900m worth of immediate relief is coming on stream and town planning laws are being relaxed.
"Many small high street businesses have been calling for this kind of action for a long time and it couldn’t have come soon enough – especially as there will also be a new fund to improve infrastructure and transport, to re-develop empty shops as homes and offices, and restore and re-use old and historic properties."
Refreshed Northern Powerhouse strategyBob Ward, North West senior partner for EY: “The North didn’t get too much of a specific mention by the chancellor in his Budget speech but looking into the detail of the Budget itself, commitment to the Northern Powerhouse and crucially, to the delivery of Northern Power Rail was most certainly reinforced.
"I’m heartened by several of the announcements, firstly that the government plans to publish what it calls a 'refreshed' Northern Powerhouse Strategy next year – that demonstrates renewed commitment to the importance of improving productivity across the region."Crucially, Northern Powerhouse Rail gets a special mention with direct recognition of how it will transform the economic geography of the North and a pledge of a further £37m on top of previous commitments to support its development.
"Another little fillip to have been thrown our way is the £100,000 support to develop proposals for Eden Project North. That might be short change for the government but for the people in and around Morecambe, the regeneration benefits of such a project coming to fruition would be immeasurable."It demonstrates a recognition that growth and prosperity comes not just from major infrastructure and connecting towns to city centres but also by creating sustainable eco systems within our regions towns as well."
Apprenticeship levy reducedGuy Lawson, director of North West Civil Engineering Contractors Association: “We welcome the cuts to the Apprenticeship levy, however, feel that this could have been an opportunity to go further. We believe that a training levy – which has building a skilled workforce overall as its key goal (and not simply apprentices) would benefit the North West’s economy – and therefore that of the UK.
“Investment into North West broadband is a positive step – benefiting businesses, customers and those in education in the years to come. It will also be crucial to invest more into the people who deliver the projects across the region and we continue to work closely with contractors in the area to take advantage of the opportunities clearly developing here.
“The scourge of potholes across the North West has long since been a thorn in both local councils’ and the Government’s side, as well as the motorist. However, it appears that the majority of the fund will be spent on ‘major roads’ still causing a headache for many across the North West. We hope the Government will heed the voices of local authorities, everyday drivers and businesses who are footing the bill to maintain the current road network when we all know that ‘prevention is better than cure’."
Support for independent retailersJo Causon, CEO of The Institute of Customer Service: "Independent retailers are finally getting some much needed breathing space in an unsettling retail environment. The reduction in business rates, which have been a burden to small businesses, will be welcomed, as they can now use this extra capital to their advantage and reinvest in their staff and stores in order to remain competitive.
"However, more still needs to be done to help the high street continue to be a place where communities come together. In an increasingly fragmented world, it is critical that consumers have choice and for many, it means their brand of choice needs a high street presence. We need to build on this announcement, and create an innovative environment where retailers create a destination led experience which provides a combination of bricks and mortar, and online.’’
Challenges remainChris Watson, associate at WNJ chartered accountants: “The measures to support struggling high street businesses, increase the annual investment allowance from £200k to £1m from 1 January 2019, and cuts to the cost of apprentices are really welcome moves, and a sign that the xhancellor has listened to the concerns of the small business sector.“He has also listened to other worries and has ditched plans to drag more small companies into the VAT regime. The decision to protect the Employment Allowance – and focus it on small employers is another measure which will be widely welcomed.
"There is an awful lot in the Budget speech which is aimed at reassuring smaller businesses that the government is on their side.
“However, there has to be a note of caution, given the Chancellor’s indication of another Budget in the spring if we leave the EU without a deal.”
Personal tax thresholds raisedChloe Greenbank, a senior manager at Rotherham Taylor: “While this initially looks like a very positive Budget, full of growth figures, falling deficits and future spending there is little in it to help the nation’s small businesses which are the backbone of our economy.
“Facing the prospect of an uncertain Brexit and with changes, such as the digitisation of tax on the horizon, few will be impressed by the Chancellor’s speech."Individuals will gain from the latest Budget as well as both the Personal Tax Allowance and Higher Rate Income Tax Threshold increase.
“The Higher Rate Threshold, in particular, has leapt ahead of its target by two years to rise to £50,000 from April 2019. This will mean that one million fewer people will pay the Higher rate in 2019/20 than in 2016/17.”