The Budget was largely a case of too little, too late for most businesses. The Chancellor needed to use Wednesday’s announcements to shore up the stuttering UK economy. A roaring success it was not.
While the headline announcement, a 2p cut to the National Insurance contribution rate, is clearly aimed at winning over disgruntled voters, many still won’t be better off due to the freeze in tax band thresholds – a measure brought in when the PM Rishi Sunak was Chancellor.
And as with last November’s Autumn Statement, it’s disappointing to see the Chancellor largely neglect British businesses with today’s measures. No such cut in the NI rate was announced for employer contributions, for example – a measure that would have been welcomed by struggling businesses in the retail and hospitality sectors especially.
Further, while the current non-dom system is complicated and in need of reform, the longer-term removal of the benefit after four years may backfire with a sizeable impact to British businesses.
Firms, especially in the City, are already facing intense competition in the race for global top talent, and the non-dom tax status has thus far been a powerful incentive to work in the UK. The Chancellor said himself in 2022 that these individuals could just as easily choose to live in other countries and contribute to their businesses and economies – and now they may well do so.
Overall, the Budget has done more to secure media headlines than to secure long-term, sustained prosperity for British people and businesses.
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