Business Finance: Stuart Wilkinson finds some good news in the Budget
- Credit: Archant
Despite the fact that George Osborne had little room for tax giveaways, there were a few measures in his penultimate Budget before the election which are good news for local businesses.
For “makers”, the Chancellor doubled the amount of lending for exports to £3billion, whilst cutting interest rates on this lending by a third and providing increased practical support from UK Trade & Investment (UKTI).
These initiatives are great for local businesses thinking about their international strategy and could change the status quo, making it more attractive to lenders and local exporters of all sizes who would like to offer overseas buyers more competitive payment terms.
The doubling of the Annual Investment Allowance means from this month businesses will now get 100% tax relief in year one on investment in plant and machinery up to £500,000.
This increased relief will not expire now until the end of 2015, giving a longer timeframe than previously expected for businesses to invest and take advantage of this increased incentive.
For those businesses who do more than make, but also innovate, the increase in refundable R&D tax credits could provide smaller businesses with more cash to invest during their vital early years – before they achieve profitability.
Recognising that skills are at the heart of any business, a funding package for an extra 100,000 apprenticeships over the next two years will help local businesses and young people looking to get a foothold in to work and to develop the skills that they need for a long term career.
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For “doers”, there was an increase in the personal allowance which, for the first time this parliament, has been allowed to flow through to higher rate taxpayers, contrary to pre-budget predictions.
Yet, there is a feeling that more could have been done for regional economies. The Local Growth Fund pot of money remains smaller than originally envisioned and measures to force local authorities to use balance sheet assets to regenerate and reinvent City and Regional economies would have been helpful.
A modern infrastructure is vital to ensure regional communities thrive and the delay in getting many programmes started could hinder some of our regional business communities on their journey to growth.
: : Stuart Wilkinson, is head of tax for KPMG in East Anglia.