The Chancellor presents his Budget today. With an election looming, what can we expect? David Nowell reports.
Companies don’t want headline grabbing initiatives – certainty and a lessening of the burden is what they’re after.
So the message to the Chancellor is to focus on improving and simplifying, says Anthony Cox, tax director for KPMG in Preston.
Mr Cox said: “Creating conditions that stimulate innovation, investment and employment has got to be the primary objective of any government’s tax regime.
“Our Middle Market and SME clients are broadly pleased with the direction of travel in UK legislation: they don’t want headline grabbing initiatives – certainty and the rather dull lessening of the burden is what they’re after. So the message to the Chancellor is to focus on improving and simplifying.”
He said : “From April, the corporation tax rate for businesses across the board will be 20 per cent ; the lowest in the G20. This not only encourages investment and employment but, in matching large and small company tax there will also be welcome consistency, so I am keen to see this take effect.
“A greater commitment to capital investment would be welcomed by the many businesses with growth on their agenda. An extension to the 100 per cent tax relief on plant and machinery spending of up to £500,000, which is due to expire at the end of this year, would be a positive move.
“Meanwhile, those bold enough to expand or upgrade into a new property should get even more relief. It’s currently rare for building costs to secure relief unless the spend is on property in an enterprise zone or a designated area.
“On the subject of property; if the Chancellor were to build on the Autumn Statement’s rate relief easing and discounting while the structural review takes place, there would be cheers from some high street businesses.”
Jonathan Boyers, head of Enterprise for KPMG in the North, called for simpler access to funding.
He said: “We are seeing a maze of funding options that entrepreneurs must navigate in order to access much needed finance in the right form for their business. In fact, according to our recent survey of small and medium businesses, a surprising 70 per cent have not used any of the government reliefs available to them.
“This suggests, not that help funding growth isn’t welcome, but that it’s too much of an uphill battle for a busy entrepreneur to track down and secure the best initiative for helping to boost their business. Any simplification of the process of accessing alternative finance will be well received by those running our regional companies.”
Noam Handler, tax partner at EY in the North West comments: “The election is just 50 days away from the day of the Budget, but despite current political sensitivities we should still expect to see the announcement of a few targeted measures.
“For example, we can expect some relief for the North Sea industry in the form of lower corporation tax for those companies investing in the UK. The Chancellor may also choose to press ahead with a further increase in the tax free personal allowance or use the Budget to provide details around the reform of business rates.”