Quantuma's Carl Jackson responds to the spring budget
Chancellor steps up to recognise challenges SMEs face
Corporate recovery experts at Quantuma have praised Chancellor Philip Hammond for recognising the “pinch” points in the economic recovery.
Managing partner Carl Jackson said it was a Budget that took the heat out of some key areas, not least business rates which were set to hit many businesses hard.
Measures include a total of £435 million for firms affected by increases in business rates, including a £300 million hardship fund for the small businesses worst affected.
And he raised a glass to the news that pubs with a rateable value of less than £100,000 will get a £1,000 discount on rates they pay.
“But the most significant announcement was that any business losing existing relief would not pay more than £50 a month more,” he said.
“This could be crucial in staving off financial difficulties and will come as a relief to many small business owners in the south and south east, particularly in the high street.”
But while he indicated a move to ease one tax, the Chancellor flagged up a major crackdown on those who seek to avoid tax.
From July 2017, there will be penalties imposed on promoters or facilitators of tax avoidance schemes that fail in the courts – an announcement that will cause a strong current of concern among firms that have been involved in aggressive tax planning.
And on offshore evasion, he announced that a requirement to correct previous non-compliance by the taxpayer would be introduced.
Carl Jackson said: “HMRC has been moving in this direction for some time, so the warning signs were there.
“It remains to be seen what the scale of penalties might be and what impact they might have on firms that have participated in or promoted tax saving schemes that are now being deemed illegal by the courts.”
Turning to measure to boost the economy, he welcomed the new detail on support for research and development (R&D).
The Government’s National Productivity Investment Fund includes £4.7 billion for R&D, and the Chancellor announced the first schemes available under this.
These include the Industrial Strategy Challenge Fund with an initial investment of £270 million in 2017-18, £250 million for talent funding over the next four years, and £100 million over the next four years for global research talent.
“Funding ways and means of both growing and finding the right talent, whether from within the UK or across the globe, is vital to future growth,” he said.
He said that otherwise the Budget had been clearly aimed at not rocking the boat for business.
“He obviously has one eye on Brexit, a word which was not mentioned once in his speech, and the tax measures announced were of limited significance for business.
“The increase in the taxation of self-employed is clearly targeting those who, in the absence of a limited company, would or should be taxed as employees.
“And we will watch with interest how successful HMRC is in reducing the administrative burden associated with businesses making R&D claims. Any reduction to the complexity of these rules would be very welcome,” he commented.
“Otherwise, it was very much a ‘Steady as she goes’ Budget,” he said.