Business leaders comment on 2016
On 16th March George Osborne announced his economic policies for the year ahead.
Topics under discussion included the future of education, public spending, tax, pensions, housing and infrastructure.
There was also a report on the state of the economy and business.
Key facts are Headline rate of corporation tax to fall to 17% by 2020, annual threshold for 100% relief on business rates for small firms to rise, debt interest payments used by larger firms to cut corporation tax bills will be capped and anti-tax avoidance and evasion measures to rise.
Business leaders discuss what these policies mean for businesses and the south west.
Jeremy Richards – Head of JLL Bristol office
The headline act for the West of England in today’s budget was the announcement of a new West of England mayoral authority which will lever £900m of investment.
The investment of £14.5million in extending broadband coverage in the South West will be welcomed by businesses, and is particularly good news for Bristol & Bath’s thriving digital technology sector.
The Government has made an encouraging first step towards exploring the possibility of a new junction, 18a, on the M4 that would link with the Avon Ring Road, near the Bristol & Bath Science Park. But past experience shows that, even if this study finds there is a need for a new junction, it will be a long time before it comes to fruition.
We welcome the commercial stamp duty changes but would have liked to have seen the Chancellor take the reforms a step further. In reality, the vast majority of smaller properties affected by the stamp duty change are leasehold, rather than freehold, so the material impact of this change may be minimal.
Ann Carlton – Director of Private Client at Thrings
“Britain,” the Chancellor said, “has one of the most competitive business tax regimes”, and it was interesting to learn that corporation tax rates are to be cut to 17% by 2020. Mr Osborne also announced a series of measures aimed at tackling tax avoidance and tax evasion, including removing loopholes for multinationals and targeting large international corporations that deliberately over-borrow in the UK.
Elsewhere, the introduction of a new flexible lifetime ISA from April 2017 will be welcomed by those under 40s looking get a foot on the property ladder or save for their retirement.
However, the new ISA is likely to be viewed by some as posing a threat to current providers who charge ever-increasing management fees for looking after pensions.
Jenny Batchelor – tax partner at Grant Thornton South West
Although the chancellor announced measures aimed at benefitting business – new exemptions for micro businesses, a reduction in headline Corporate Tax rate, and dedicated help for mid-sized businesses by HMRC, a lot of these measures will require more rules and regulations.
Complexity has serious commercial implications for business. We know, for instance, that more than half (54%) of businesses say the current tax system slows down commercial decisions – with mid-sized businesses the most affected by this.
It’s therefore disappointing that the Chancellor did not use today’s opportunity to push for real and material change to simplify the system.
Our cities and regions have enormous potential and opportunity for sustainable economic growth. With public, private and third sector entities working together to unlock productivity within the regions, significant value could be added to the UK benefiting people and businesses.
Gary Sheppard – Chief Executive Officer, Helm Construction
An increasing amount of our business comes from across the Severn Bridge so the halving of the bridge toll will help a little but we also attract talent from Caldicot, Chepstow, Newport and the Forest of Dean so this will have a real impact on their ability to minimise the cost of their commute.
The corporation tax being lowered is good news for us and other businesses. 17% means more cash will be retained within the business for funding our future growth and development
The personal tax-free allowance and increase in 40% tax threshold will certainly benefit our employees ensuring that their take home pay is increased. This will evidently affect staff (positively) at both ends of the spectrum.
The fuel duty being frozen is great for us as a business and for our staff in general. We should also see supplier costs stabilised as transport forms a significant part of their cost base.
Peter Clough – Head of office at Osborne Clarke Bristol
We welcome the measures announced by the Chancellor on improvements to the region’s road and rail network.
Transport issues are right at the top of the agenda for businesses in our region.
We heard much in today’s Budget about the Northern Powerhouse, as well as other evolving regional collaborations, and this announcement on bridge tolls will provide a timely boost to the Severn/Great Western Powerhouse concept by increasing connectivity between Bristol, Newport and Cardiff.
Likewise the £3m earmarked for improvements to our railway stations is most welcome, as is the £500,000 to fund a study into the new M4 junction 18a at what is a traditional traffic bottleneck to the north and east of Bristol.