By Robert May, Managing Director of Toast of Surrey
Budget time is often one that is met with reservation, or even genuine anxiety from business leaders as they brace themselves against possible additional financial burdens. However, I believe yesterday’s Budget (23rd March 2011) has offered some tangible benefits to businesses, not least in the form of the cut in Corporation Tax by 2% in April, as opposed to the planned 1% cut.
Whilst I firmly believe there are always opportunities for businesses selling the right products and services, no one can argue that we are living in difficult financial times. Any help in alleviating costs is very welcome and crucial to assisting all levels of business, which in turn is the engine that is driving the wider economic recovery. I also applaud the foresight in the Chancellor’s Budget in continuing to cut Corporation Tax by 1% over the next three years (reducing it to 23%) — which will undoubtedly help entrepreneurial business to continue growing over the next few years.
Overall I feel this is a Budget that has supporting small businesses firmly in mind. The promise that there will be no new regulation on firms of fewer than 10 staff (for three years) will be a relief to small companies who have, in recent years, struggled against increasing red tape and the associated costs from it. We work with many SME companies (both as clients and partners) and have seen the negative affects this has on growth and success. Equally small businesses will undoubtedly welcome the business rate relief holiday for small firms being extended for another year, to further support this important sector of the business economy.
Other highlights for entrepreneurial business as a whole include the announcement of 21 ‘Enterprise Zones’ in England, which will be backed by tax incentives. Its also encouraging to see further support for technology and training (a vital area of UK expertise, but one which is sometimes overlooked) with the earmarking of £100m funding for science facilities and also funding for a further 12 university technical colleges. As an ardent supporter of apprenticeships (at ramsac we have taken on three apprentices in the last 12 months) I am delighted to see an extra 40,000 apprenticeships for young people out of work, which is excellent for the apprentices, the companies that utilise their skills and obviously for the country and the economy as a whole.
Of course many of the wider benefits announced in yesterday’s Budget will also indirectly be of great benefit to businesses and the economy. The immediate cut of fuel duty will have a positive (albeit small) effect across the economy, both for private and businesses drivers, and for commercial road users — which has a knock-on effect to the costs of services and goods that are supplied via road transport. The promise not to increase personal tax rates and the increase in the tax allowance rate will have a direct effect on people’s spending habits, something which will benefit businesses of all sizes which directly or indirectly rely on consumer confidence to grow.
Whilst a helpful Budget alone can’t single-handedly revitalise the UK economy, I believe the measures announced yesterday will be felt positively across the business community. As a business leader myself I’m well aware that often it is the small benefits that can add up to make a big difference. Chancellor George Osborne’s announcements yesterday have certainly given me hope that the government is listening to the needs of UK business and that the new measures in place will help those that want to succeed to reach their goals — so we can all reap the benefits.