By Jonathan Davies
The Chancellor George Osborne has delivered what has been described as a "barnstorming" Budget for businesses, in the first Conservative Budget for 19 years.
Here, we bring you the latest reaction from the business community. Businesses big and small, and representative organisations have been having their say on the Chancellor's plans.
John Cridland, CBI Director-General: “This is a double edged Budget for business. Firms will welcome measures to balance the books and boost investment, but they will be concerned by legislating for wage increases they may not be able to deliver.
“Firms have been unwavering in their support for the Chancellor’s deficit reduction plans and will welcome the clarity that the new fiscal rules provide. Other standout measures include making the Annual Investment Allowance permanent at £200,000, which the CBI called for, as well much-needed investment in our roads network.
“The further reduction in corporation tax is a welcome surprise but tax reductions for employers don’t appear to match the businesses most affected by a rise to £7.20 in the National Minimum Wage next April — a 7% increase.
“The CBI supports a higher skilled, higher wage economy, but legislating for a living wage does not reflect businesses’ ability to pay. This is taking a big gamble that the labour market can absorb year-on-year increases of an average of 6%.
“Firms want to play their part in training up more apprentices but an apprentice levy is a blunt tool. A volunteer army is always better than conscription but the CBI will work with the Government to make the best effect of this measure.”
Chris Sanger, Head of Tax Policy at EY: “Businesses were left with mixed messages from today's budget. The promise of cuts in corporation tax rate from 2017/18 was tempered by large business being the biggest funder of the Chancellors' budget through the requirement to pay taxes three months earlier. This measure alone gave the Chancellor almost £4.5bn in 2017-18 and echoes the change that Gordon Brown introduced in his first Budget, back in 1997.
“On a positive note, this cash flow raid also allowed the Chancellor to fund the rise in the Annual Investment Allowance to £200,000.”
Jonathan Hopper, managing director, Garrington Property Finders, on non-dom status: "Abolishing the non-dom tax status could defer foreign buyers from investing in London who will instead look to investment markets with less punitive tax regimes.
"And without the influx of international buyers, the London prime property market, which has helped prop up the London and UK housing market during the darker days, could be facing some extremely choppy waters."
Peter Ames, director of strategy at office space search engine, Office Genie, on productivity: “Building more roads, investing in skills to get the right people in right jobs and introducing an apprenticeship levy on large firms are all a start. But the devil will be in the detail, which we’ll hear more about this Friday.
“The issue is it’s easier to boost productivity in manufacturing such as the car industry. But the UK is dependent on services like banking and the legal profession. And it’s very hard to measure or even increase productivity of say, a hairdresser. How do you cut hair faster or cut more hair with fewer people?"
Toby Ryland, corporate tax partner at HW Fisher & Company, on corporation tax: “Britain may lack the sunny beaches of most offshore tax havens, but the continued slashing of Corporation Tax is an unambiguous call to foreign companies to bring their business here.
“But the tax giveaways won’t favour all businesses. The cut in employers’ National Insurance contributions will make only a modest contribution to SMEs — and its benefit could be more than outweighed by personal taxes on dividends.”
John Allan, national chair of the Federation of Small Businesses: “There was further support to reduce corporation tax, fix the annual investment allowance and boost regional growth, where investment in roads will be particularly well received. We agree with the focus on productivity but need to see the details to raise skills through the apprenticeship levy on large firms. Planning reforms are also critical to raising productivity and again we look forward to seeing the proposals on Friday.
“However, even though offset by a welcome increase in the employment allowance, some will find the new National Living Wage challenging. Changes to the treatment of dividends will also affect many of our members.”
Michael Izza, ICAEW Chief Executive, on tax: “The Government still has much to do to secure the long economic recovery and bring the deficit under control. It therefore needs to be doing more to support businesses by encouraging investment, growing exports and helping improve productivity. There was little detail in today’s Budget on how it intends to do this.”
Katharine Moxham, spokesperson for Group Risk Development, on Employment & Support Allowance: "Nobody wants to think about something bad lying just around the corner, but the fact is, sudden loss of income can happen to anyone. Given that income from employment formed nearly three quarters (72%) of total household income in the UK in 2013/14, it’s vital to look beyond the immediate and consider what back-up system is in place. Our research has found that nearly a quarter (23%) of employees would not be able to provide for their family if they were off sick for six months or more, showing not enough thought has yet been given to the ‘what if’."
Vince McLoughlin, partner at Russell New, a firm of business & tax advisers, on the Annual Investment Allowance: "Confirmation that the annual investment allowance (AIA) for capital allowances will be fixed at £200,000 is a relief for the business community. By committing to a long term rate, Osborne has provided stability and consistency for firms that like to plan and invest for the long term, many of which may have delayed their investment plans up until this announcement. Confirming that the rate will be kept at this higher level will kick-start the kind of investment needed to enable businesses to thrive.”
Jo Causon, CEO of The Institute of Customer Service, on Sunday trading hours: "Being ‘open all hours’ will not necessarily guarantee that customers get the shopping experience they want.
“Britain is already renowned for a long-hours culture and by encouraging more time ‘on the clock’ we could create a nation of disgruntled employees who feel compelled to put the hours in."