Here we share some of the view from business voices in Bath & Somerset on the Budget:
David Westgate, group chief executive of the Andrews Property Group, said the big news for his sector was the abolition of stamp duty for first time buyers up to a threshold of £300,000.
Stamp Duty
He said: “Being a regular commentator on the need for Stamp Duty to be reformed, it is encouraging to see the Chancellor has announced stamp duty will be abolished for first time buyers on property purchases of up to £300,000 and for higher value areas such as London, on the first £300,000 of a property’s price. It doesn’t, however, go far enough in my view.
“Stamp Duty is one of the biggest, if not THE biggest, obstacles in getting our housing market really moving and I, along with many others, would have welcomed the removal, or at least reduction, of the surcharge on second properties.
Housebuilding:
“The Chancellor’s pledge to guarantee 300,000 new homes are built each year is to be welcomed. A lack of supply is currently skewing the market and has for a long while needed to be addressed.
“However, the proof here will be in the pudding. Simply, this is a very complex subject and isn’t just a case of building more properties. To successfully achieve this, we need to start with an assurance the planning system is fit for purpose and won’t encroach the realisation of this much needed target.”
Phil Smith, managing director of Business West said the Chancellor got the tone of the Budget well given the weak hand he had to play.
Phil Smith, Business West
Frozen taxes:
“Most of the big announcements were on areas where tax rises were postponed or frozen – with frozen fuel duty, frozen Air Passenger Duty, frozen beer and spirits duty and a postponement of a possible cut in the VAT threshold.
“Small businesses will also be heartened by the announcements on business rates, which mean lower rates for many smaller firms over the next five years – something that we, with the British Chambers of Commerce, have been campaigning long and hard for.
Housing:
“There was a much greater emphasis on housing – a pressing issue for both businesses and young people in our region – even if his announcements could hardly be characterised as betting the house on solving the problem.
“The headline commitment to raising housebuilding levels to 300,000 homes per year was welcome. The big question is how it is delivered.
“On the supply side, there was a series of welcome new funds announced, for SME housebuilders, for housing infrastructure and to ‘unlock strategic sites’. There is also the promise of further planning reform ahead and measures to make it easier for councils to build affordable homes”.
Bigger picture:
“But the underlying – and more ominous – economic message of the budget was that Philip Hammond is right not to go big on public spending.
“The UK has downgraded its future economic growth forecasts, with GDP forecasts dropping downwards. Two years ago, the long term UK growth rate was thought to be 2.5%, now it is 1.6%.
“This is the first time in modern history the official UK GDP growth forecasts are below 2% every single year announced. Rather than leading the pack of G7 countries, the UK is now its worst performer.
“At the same time, government borrowing forecasts were lowered for this year, but were higher from 2019 – underlining that cash is not something the UK can afford to throw around.”
Jason Dutton, managing director of business organistion 4Networking which has groups in Bath and across Somerset said there was little of significance in the Budget for SMEs.
Jason Dutton, managing director of 4Networking
“There was nothing dramatic in this Budget – and maybe that’s a good thing at the moment. Businesses are facing much change with both GDPR and Brexit and putting more financial pressure on them would not be welcome.
“Equally there was little to make the SME sector feel supported or recognised for the contribution they make to the economy now – and will also make in the months and years to come.”
Highlights for the organisation’s members were:
- No lowering of the VAT threshold.
- Some support for small housebuilders through the commitment for more housing.
- Continued support for apprenticeships.
- A commitment to technology, research and development.
Lowlights were:
- No extra support for start-ups.
- No mention of enforcing prompt payment.
- No support for small companies wanting to export.
“The holding of the VAT threshold was welcome for many small businesses but also there were other business owners who wanted to see the threshold come down so they are more competitive when quoting for work. However the threshold promise is only good for two years and it begs the question what then?” Jason said.
Rob Chedzoy, tax partner at Milsted Langdon has reviewed the Budget saying it offers little to help small businesses.
Rob Chedzoy, Milsted Langdon
“It is nice to see Philip Hammond recognises the importance of SMEs to the UK, however, it is a shame one of the measures buried in his Budget will see costs rise for businesses of all sizes.
“Whilst wages do need to rise to meet inflation, an increase of around 4.4 per cent for workers aged 25 and over may be more than some companies can endure.
“Some will have to look at other areas of their business in order to meet these costs, which may mean reducing investment in years to come – something that businesses may already be doing in light of Brexit.”
Rob recognised there was a small giveaway to SMEs, with the changes to business rates with the date at which rates switch from being set by the Retail Price Index (RPI) to Consumer Price Index (CPI) brought forward to April 2018 – two years ahead of schedule. This is expected to reduce the burden of business rates by £2.3 billion over next five years.
The Chancellor also confirmed that the Government would invest £2.3 billion in research and development, setting aside additional money, worth up to £500 million, for the development of AI and broadband.
R&D Research and Development Expenditure Credit would increase from 11 per cent to 12 per cent on qualifying expenditure, to help firms invest more. Whilst of more relevance to larger businesses, this improvement in the credit will impact on some smaller businesses which have grant funded R&D for example.
“I would imagine many small business owners will be quite disappointed by this Budget. Whilst there are a handful of ‘gifts’ scattered here and there, the proposals to address some of the major issues companies are currently facing.”
