Good Budget for business
HELEN SANT, head of tax for KPMG in East Anglia, reviews the Chancellor’s ‘Budget for Growth’
MANY people thought that the “Budget for Growth” would have few surprises in it but there were some good news pieces, and much was announced to help businesses with their ambitions for growth.
The Chancellor delivered a budget that had UK business and entrepreneurism at its heart and is likely to be received warmly in the corporate arena. Cutting red tape, increasing certainty around the tax system and creating the right environment to encourage investment were high on the agenda and will provide a solid foundation for business to build their growth strategies.
The overarching theme was the need to make Britain competitive once again as a place to do business. This was signalled in three ways: in the money found for an additional cut in Corporation Tax and for improved tax treatment of business start-ups and research and development – an area that is very important in our region.
The Chancellor promised a major simplification of the tax system, presided over by the Office of Tax Simplification, and promised a bonfire of regulations, with the tax code being reduced by 100 pages.
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However, improving competitiveness is not just about tax. The Chancellor identified a need for a more competitive and better educated, work force, and made money available for 50,000 apprenticeships, 80,000 work experience placements and additional investment in university technical colleges, including Cambridge and Norwich.
This continued commitment from the Government to increase the number of apprenticeships, ensuring that people have the right breadth of skills they need for the workplace, is extremely welcome news.
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However, there remains a challenge as to whether enough employers will come forward, particularly given the amount of perceived bureaucracy involved.
The Chancellor also billed this as a budget to help those in greatest need. The simplification of the tax system included a rise in the personal allowance and first time buyers are helped by assistance in meeting the deposit for house purchase. Motorists will also benefit, from the reduction in fuel duty, a reduction in Vehicle Excise Duty and improved mileage allowances.
Overall this was a politically astute budget, aiming to meet two objectives: to reduce the pain of the ordinary voter where it is most felt, notably in the housing market and in the cost of filling up the car with petrol; and to signal a future pro-growth, pro-enterprise, pro-export and pro-investment stance for government policy.
The sum of money devoted to these objectives could only be small, because getting the public finances back to health remains the overarching objective. But the Chancellor managed to find some money and used it to send out some important signals of intent.