Businesses react to the Spring Budget

What are there thoughts?

Philip Hammond, Chancellor of the Exchequer has announced his Spring Budget plans but what do the businesses think?

Giving his initial reaction to the Chancellor’s Budget, Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said: “Businesses had been advised to expect minimal change, rather than a blockbuster Budget, and Philip Hammond did not disappoint.”

“Short-term support for firms hardest-hit by business rates rises will be welcomed, along with commitments to technical education, digital connectivity, easier R&D tax credits, and a one-year delay to digital tax reporting for the very smallest firms. Conversely, hikes to dividend taxes and national insurance for the self-employed will be viewed far less positively by entrepreneurs.”

“While business people appreciate a steady hand on the tiller, the government is sending mixed signals by holding investment largely steady at precisely the time that it is exhorting British businesses to double down. More needs to be done in the coming months to improve infrastructure and encourage lagging business investment to ensure the UK is Brexit-ready.”

Kate Ison, senior associate at international law firm Berwin Leighton Paisner, said: “Promoting strong compliance and encouraging good corporate governance continues to be a feature of the current landscape. Tucked away in the Budget, the government has confirmed its intention to work constructively with large businesses and to consult on its process for risk profiling during summer 2017.”

Stephen Kelly, CEO of Sage said: “We have long campaigned for the Government to undertake a complete overhaul of the Business Rates system. I welcome the rates changes announced in today’s Budget – including further support for businesses coming out of rates relief and more relief for pubs. But I fear this is the Chancellor simply paying lip service to pressure from industry bodies who have warned this Government about the detrimental effect the business rates tax will continue to have on too many British small businesses. This system is unfit for the digital age – it doesn’t need tinkering around the edges, it needs total overhaul.”

Sam Dumitriu, Head of Projects at the Adam Smith Institute, said: “We knew this would be the dullest budget in recent history – the Chancellor even leaked that in advance. That’s not necessarily a bad thing – exciting budgets tend to contain ill thought-out ideas, but there’s a lot he should be doing now to prepare the economy for Brexit by cutting the worst taxes to make us more competitive.”

“The Chancellor missed an opportunity to make major reforms to our outdated corporate tax system or tackle the thicket of loopholes and exemptions that plague our tax code. But, he has another budget in the Autumn, that’ll be where the real action is. He should think hard about deeper reforms then.”

Paul Evans, regional director, Central London SME Banking said: “Small businesses in London will be encouraged by the new measures for business rates, helping them to adjust to the new regime, although they will not get full clarity until the announced consultation.”

“Infrastructure and transport links also remain key concerns for Londoners. Our recent research shows that 58% of those in the capital believe a lack of infrastructure investment is holding back economic growth. New powers given to the Mayor to upgrade the capital’s transport links will provide a much needed boost to services within London and also benefit the UK as a whole.”

Carolyn Fairbairn, CBI Director-General, said: “This is a breakthrough Budget for skills. There has never been a more important time for the UK to sit at the global top table of technical education for young people.”

“Firms will be looking for ongoing partnership with the Government as they try to make the Apprenticeship Levy work.”

“However, with inflation rising and the cumulative burden weighing on businesses’ shoulders, limited relief for firms hit hard by business rates falls short.”

“Firms are wholly committed to the health and wellbeing of their people, and are pleased to see an increase in spending on social care.”

Sue Terpilowski OBE, London Policy Chair, Federation of Small Businesses, said: “FSB London welcomes the fact that the Chancellor has listened to the small business-led campaign on business rates. The £435 million of new money is a direct and much-needed response to those facing astronomical hikes in their business rates. It is vitally important that the £300 million assigned to Councils as hardship money is available for London Boroughs who are most in need of support.”

“Mr Hammond announced that he has made a deal with the Mayor of London in terms of devolution and we await to see the detail of this agreement.”

“However, the National Insurance rise to 10% next year and 11% in 2019 should be seen for what it is – a £1 billion tax hike on those who set themselves up in business. This undermines the Government’s own mission for the UK to be the best place to start and grow a business, and it drives up the cost of doing business. Future growth of the UK’s 4.8 million-strong self-employed population is now at risk. Increasing this tax burden, effectively funded by a reduction in corporation tax over the same period, is the wrong way to go.”