Business leaders from across the North West have reacted to Chancellor Rachel Reeves Budget.
Rachel Nutt, partner MHA, said entrepreneurs have taken a real hit.
“The entrepreneurial business owner has taken a real hit in today’s budget. Aside from the annual increase in employers national Insurance, and the anticipated loss of the 10 per cent capital gains tax rate on a sale of shares, entrepreneurial business owners need to radically rethink their exposure to Inheritance Tax post budget.
“The 100 per cent relief from IHT for all shares in trading companies that business owners have enjoyed has now halved for all businesses worth over £1m.
“Whilst the speech suggested this applied only to AIM shares, unlisted shares in your family-owned training companies also appear to be in scope.”
Steve Rotheram, Labour mayor of the Liverpool City Region, liked what he heard.
“Today’s Budget is a recognition of two things: that this government inherited an economy badly mismanaged over years, and that only by empowering regions like the Liverpool City Region can we deliver growth and chart a path to a fairer, more prosperous future.
“The Liverpool City Region has long championed the power of devolution to deliver real improvements, and we’re pleased to see this government recognise that local leadership and national support, working hand-in-hand, can achieve transformative results for our communities and Britain as a whole.”
Steven Mason, an insolvency practitioner and senior manager at Inquesta, said the Budget “may not have felt as brutal as first anticipated”.
“However, like everything, the devil is in the detail,” he added. “The Chancellor unveiled ‘a high tax, high borrowing and high spend’ fiscal event, on a level rarely seen before, which is likely to be seen as a blow to businesses.”
Alison Horner, head of indirect tax at MHA, asked will the beer tax cut be enough for the struggling pubs sector?
“There was a significant cheer from the House when the chancellor announced that there would be a 1.7 per cent cut in tax on draught beers with an ABV of less than 8.5 per cent,” said Horner.
“The cut will reduce the tax rate from £19.08 per litre of alcohol to 18.1 per cent. For a pint of beer with an ABV of 4 per cent, this means the tax will reduce from £36p to £34p.”
Nuno Gil, professor of new infrastructure development at Alliance Manchester Business School, said despite the Chancellor’s decision to alter the fiscal rules signalling more capital will be mobilised to invest into the UK’s infrastructure, “there are major challenges that need to be addressed to help us deliver large-scale projects efficiently”.
“Current planning legislation mandates project managers to balance the interests of the shareholders with those of all stakeholders, from construction workers to local communities and authorities.
“However, economic criteria to assess value for money tend to be shareholder-centric, making it hard to raise the necessary money to conform to the stakeholder social and environmental concerns.
“This leaves managers between a rock and a hard place, forcing them to engage in endless bargaining with opportunistic stakeholders and unable to predict final project costs and duration.”
Paul Cherpeau, chief executive of Liverpool Chamber, added: “The imperative at this Budget was for the government to provide confidence and reassurance to businesses. It is clear the Chancellor has sought to provide longer term clarity across a range of areas, but there are also a number of issues which will no doubt leave businesses fearful.
“Businesses will be encouraged by a new long-term programme of public investment and capital spending on infrastructure upgrades and boosting high-growth sectors.
“Hospitality and leisure operators may give a cautious welcome to permanent reliefs for business rates and the cut in draught alcohol duties, hopefully giving them some breathing space and a level of certainty moving forward.”
Shevaun Haviland, director general of the BCC, said it was a “tough budget for business to swallow”, but the Chancellor had “looked to ease the pain by holding out a promise of better days ahead”.
“While some protection for smaller firms is welcome, the increase in employer National Insurance Contributions will place a further cost burden on business. This, coupled with a 6.7 per cent increase in the National Living Wage, means many firms will find it more challenging to invest and recruit in the short-term.
“But the Chancellor has looked to off-set the upfront hit on firms by outlining a longer-term framework to provide stability for the economy.
“Plans to raise infrastructure spending, sector-specific business rates relief and additional support for small business will take some of the sting out of the tax rises. And it is encouraging to see full expensing and the annual investment allowance made permanent alongside R&D relief being retained.
“The Chancellor has also listened to our request to retain first year allowances for investments in the North Sea to help provide a just transition to Net Zero.”
This post was originally published on here
