Lancashire's reaction to the 2015 Budget
Chancellor George Osborne once more placed heavy focus on the 'Northern Powerhouse' as a crucial part of his recovery plans for Britain, with big news including a new Enterprise Zone for Blackpool.
Other highlights included a clampdown on bank earnings and tax avoidance, an increase by 20p in the minimum wage to £6.70, raising the threshold of income tax from £10,600 to £10,800 and later £11,000, the abolition of annual tax returns and a new government-backed savings scheme for first-time homebuyers.Here, we gather the opinions of the red rose county's businesses and decision-makers. Click here to read the newest opinions.
Edwin Booth, chairman of the Lancashire Enterprise Partnership:
“[The Enterprise Zone at Blackpool Airport] is very exciting news and I'm pleased that the chancellor has been persuaded by our arguments. The site's inclusion in the Enterprise Zone will support businesses in new sectors to grow alongside Blackpool's existing industries, providing new jobs and a real boost to the local economy.”
Anthony Cox, tax director for KPMG in Preston:
“[Scrapping paper tax returns] should, in theory, prompt cheers up and down the country, with none louder than those coming from the approximately 5 million self-assessing taxpayers who run their own businesses. However, if it’s going to be a truly reduced burden, then information will probably need to be drawn directly from accounting systems. That’s a massive technological challenge for HMRC to achieve in a relatively short space of time.“Owner managers have long called for an end to the seemingly endless amount of form-filling and compliance with onerous red tape that typically comes with running your own business. Indeed, our own recent survey of the UK’s small and medium-sized businesses indicates that almost half of all business owners spend at least one day a week on basic administrative tasks. Anything which reduces this perceived ‘dead time’, allowing entrepreneurs to focus on the running and growing of their business will ultimately help drive economic growth, spur job creation and increase the competitiveness of the UK. So we want to see HMRC deliver on Mr Osborne’s ambitions for them.
“The good news is that many small businesses are already embracing innovations in digital technology to support their financial reporting, such as the use of cloud-based accounting services and digital receipt banking, so this should be an easy transition for them. But will it be as easy for HMRC?”
Gill Molloy, group tax director of Preston-based Champion Accountants:
“News that the Annual Investment Allowance (AIA) tax-free threshold won’t drop radically to £25,000 from £500,000 is a common sense approach. It would be ludicrous for ministers to offer British businesses such a fantastic incentive to invest, only to then take it all away."Take up of AIA is on the up, with businesses only just realising the lucrative benefits of the scheme and we hope that the next Autumn Statement, whichever party may be successful, delivers another raft of business-boosting measures.”
Jane Parry, lead tax partner at PM+M:
"The North West is - of course - a manufacturing hub so more R&D tax credits for both SMEs and large companies would have been a boost. It was a shame but hopefully new initiatives will be announced in the Autumn Statement.
"It was also positive to learn that an enterprise zone will be set up at Blackpool Airport. The scheme is projected to create 3,000 jobs and bring new a new lease of life to the area. This is the kind of focus and investment that will help drive the North West region ahead and bring long-term and sustained prosperity."
Colin Tice, tax partner at Cassons:
“We don’t see this as an end to the tax return but it is a smarter way of getting there. January might not be as stressful for taxpayers, smaller businesses and their accountants if the annual tax return is abolished.
John Cridland, CBI director general:
"Stability and consistency are what businesses need to grow and prosper. This budget sets the tone, providing a clear plan for fiscal health and growth. It has some encouraging measures to help businesses create jobs for the benefit of all.“The brighter fiscal picture has allowed the chancellor to recalibrate his deficit reduction plans. In the next parliament this fiscal breathing space should be used to achieve intelligent reductions in public spending, together with much-needed infrastructure and innovation. With business investment a crucial driver of growth, the chancellor has signalled his intention to continue the Annual Investment Allowance. We want it to be made permanent in the Autumn Statement at £250,000 - this will fire the UK's economic kiln by spurring smaller firms to invest in plant and machinery.
“The reduction of the headline rate of corporation tax to 20% next month, is a meaningful step in making the UK the most competitive tax regime in the G20 and will help to attract investment."
Darrell Matthews, North West region director at EEF:
“The chancellor gets three cheers from manufacturers today, particularly for the measures he included to boost exporters. His decision to bring forward compensation for industries facing vast and uncompetitive energy costs, such as steel makers, is also welcome but the full package needs to be put in place as soon as possible. In addition he has committed to a stable and competitive tax regime, which we wholeheartedly support and which should go down well with local businesses.“Boosting the UK’s export performance is a national priority and the Chancellor is right to keep the pressure on by providing additional resources to support exporters in overseas markets. This is another step in a longer journey to meet the government’s £1trillion export ambitions and help cement a more balanced economic recovery.
“Looking ahead to the outcomes of the business rates review at budget 2016, manufacturers will be looking for a system that is, above all else, stable and predictable. The commitment to expand the amount of money local councils can retain from their business rates growth is welcome news and will help to incentivise growth activities in all parts of the country that can do a deal with the treasury.”
Malcolm Ireland, head of Leisure & Licensing at Napthens:
“We have already seen two years of successive cuts to beer duty help improve confidence and spur investment in the licensed trade. The British Beer & Pub Association is predicting that a third year of cuts will help create almost 4,000 jobs for the sector, and I welcome this news.
Gary Lovatt, FSB regional chairman for Lancashire & Cumbria:
“The budget contained a lot of announcements and as is always the case there will be a need to drill down beneath each individual change to see what the likely impact will be. Having said that, in the knowledge that public finances did not allow for a ‘great giveaway’ the FSB was calling on the chancellor to focus on changes which needn’t have a significant cost implication."The move to scrap the Annual Tax Return will be welcomed and is an example of how cutting red tape can be painless, beneficial and improve business efficiency. Scrapping Class 2 National Insurance Contributions for the self-employed is hugely welcome, and the reduction in corporation tax will encourage business growth and expansion.
"The review of the business rates system is certainly needed. Commitment to the ‘Northern Powerhouse’ is great in principle – we need to make sure that it has a positive link to the North of England as a whole and doesn’t just assist the major city regions on the M62 Corridor.”
Keith Pressler, director at Taylor Patterson:
"Widely leaked in the papers beforehand, the pension Lifetime Allowance (LA) is to fall once more from its current level of £1.25m to £1.00m from April 2016. This further limits the amount that individuals can save in their pensions, whilst contribution levels remain unchanged."The good news is that only 4% of pensioners would be potentially affected by this reduction, the chancellor is working on the basis of most pensioners (and voters!) being unaffected. A defence against the opposition argument that the Tories favour the wealthy and a saving on tax relief payments to boot!
"However, on a positive note, transitional protection for individuals with pension rights already over £1.00m will be introduced alongside this reduction to ensure the change is not retrospective. This together with the LA being indexed annually in line with CPI from April 2018, sees the Government trying to reduce the potential of further tax charges down the line for pension savers with large pots."The FTSE 100 index was in buoyant mood and surged on the news that ‘Britain walking tall again’ is good news for the economy and the taxpayers of the UK according to George Osborne. The big question is how long will this last and what further changes can be expected post the general election?"
Tony Medcalf, tax partner at Moore and Smalley:
“The hospitality industry and the farming industry were two winners in the budget. Tax on beer has been cut by a further 1p along with cuts to duty on cider, wine and spirits. This is the third year running beer duty has been lowered which will benefit the hospitality and leisure sector. Farmers will be allowed to average incomes for tax purposes over five years potentially reducing the tax paid.
“Petrol duty has been frozen and September’s planned increase in fuel duty has been scrapped. This is good news for commuters and businesses with heavy fuel use, such as hauliers and transport companies.”
David Grant, Moorehouse's Brewery:
"The chancellor’s penny of the price of a pint of beer means he has listened further to the industry bodies and recognised the beer and pub industry contribution to employment and the economy. But I am disappointed that George Osborne has not made any moves to level the playing field for independent brewers and raised the threshold for the relief.
"[The decision to cancel the rise on fuel duty scheduled for September] will be especially helpful to small companies like Moorhouse’s – helping to contain our costs as we grow our business."
Noam Handler, tax partner at EY in the North West:
“The chancellor has offered a fundamental review of business rates in time for Budget 2016 and the revaluation in 2017. On one side this offers the opportunity for this iniquitous tax to be reviewed, but on the other side the chancellor has constrained the scope of the review by requiring that it remains revenue neutral at a time when other countries are reassessing where the tax burden arises.
