By Edward Rimmer, UK Chief Executive Bibby Financial Services
Following George Osborne’s raft of sweeping public sector cuts announced in October last year, a Budget focusing on business growth is most welcome. Tough times call for tough measures and Osborne’s bold Budget is, as he promised, ‘unashamedly pro-growth, pro-enterprise and pro-aspiration’ for UK firms.
Osborne’s pledge to investigate the merger of income tax and National Insurance will have a positive effect on businesses, promising to streamline the tax regime making it clearer and more transparent for firms, while significantly easing administrative burden. Likewise, his commitment to reducing complexities of taxation by removing 43 relief codes from the system will be welcome news to those companies seeking to concentrate on growth.
The announcement that £350m of business regulations will be scrapped and firms with fewer than 10 staff will be exempt from new regulation for a period of three years is also a positive step towards creating a competitive start-up economy.
The surprise news about corporation tax being cut by 2% in April, instead of 1% as previously planned, and an immediate reduction in fuel duty of 1p per litre, will make an immediate impact on UK firms.
The proposed simplification and expansion of Enterprise Investment Schemes(EIS) will also stimulate business growth, as will the planned tax breaks for non-domiciles investing in UK businesses. These measures will play an important role in encouraging investment and enterprise in the economy, helping to contribute to further growth and employment in the UK. While this change to the EIS is welcome, it is unlikely to provide many firms with the flexible, easy access to cash they need to keep their businesses running and growing day-to-day.
The announcement that up to 21 new Enterprise Zones will be given tax incentives and freedom from onerous planning restrictions will do much to stimulate business start-up rates in the regions which previously have been fairly stagnant, boosting investment levels and creating much-needed employment opportunities, particularly in struggling areas in Northern England and the Midlands.
In broad terms, yesterday’s Budget has delivered for those beleaguered businesses which have struggled in recent years as a result of the global downturn. It is hoped that this Budget goes some way towards creating jobs and growth, and provides a welcome boost for the wider economy, both now and in the longer term.
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