Accountants, entrepreneurs and business people offer their opinions on George Osborne's attempt to put an 'Open for business' sign outside UK Plc
“It’s fair to say that the Chancellor thought about how best to support Britain’s 4.5 million SMEs in today’s budget.
“Tax submissions are to be made simpler, exports are expected to be doubled to £1trn by the end of the decade and there will be a renewed commitment to ensure Britain is a leading technology hub, as well as further investment in regional enterprises.
“It was also encouraging seeing Osborne support the youth with more apprenticeships, as well as considering loans for young people to start their own business. Nonetheless, the key issue for SMEs to grow is gaining access to cheap credit and the Chancellor remains committed in turning to the banks in order to lend to small businesses.
“The Government’s new credit easing scheme, which received scant coverage, is no more than making loans cheaper, relying on the banks to change a habit of a lifetime and reverse conservative lending policies. What we really need is the government to support peer-to-peer lending, encouraging private investors to directly invest in small enterprises.
“Around £1tn worth of deposits are sitting in high street banks gaining little interest and just imagine what some of that money could do in turning around the fortunes of the UK’s SMEs – the backbone of the UK economy.”
Rupert Lee-Browne, CEO of Caxton FX
“For us, the most important part of the budget was what it didn’t contain, namely the reduction of tax relief on pension contributions for higher rate taxpayers. We have an ageing population and to abolish this incentive to save for the future would be idiotic.
“The government seems to have come to its senses on this, but we note that as ever the wording of the Chancellor’s statement gives him wriggle room to come back to it. Our message to George Osborne is simple: if you have the thought again go and sit in a dark room until it goes away.”
Chris Aitken, head of financial planning at Investec Wealth & Investment
While the cut in corporation tax is welcomed, the tax relief in certain sectors like video games, animation and high-end television production seems like window dressing
Jeremy Cape, partner at SNR Denton UK LLP
“There is an overwhelming level of evidence to suggest that too many drivers are being forced to make sacrifices in their life to keep running their cars. For most of us, the car is a necessity, and with the current price of petrol as it is, coupled with yet another hike in fuel duty, the question stands: how can we realistically expect to grow this fundamental area of the economy?
“George Osborne seems to have failed to miss the fact that consumers have, quite simply, come to the edge of the boundaries of what they are prepared to accept."
Phill Jones, commercial director of Motors.co.uk
“The decision to raise the personal tax allowance next April to £9,205 and move towards £10,000 in the future is generally welcome and will provide consumers with a little more disposable income to spend on goods and services. However, whilst this is helpful in the long term, it is too little too late for those retailers already in distress, some of which may see March’s quarter date rent payments push them into complete failure.
“The decision not to further defer the planned increase to fuel duty will serve to add to many businesses’ pain and will make their ongoing battle to reduce running costs even more difficult. By not postponing this rise the Chancellor has missed the opportunity to provide embattled businesses with a little relief.”
Brian Green, advisory partner at KPMG
“The Chancellor did not say that the 45% income rate was temporary, or that he aspired to remove the rate altogether. It may be that the 45% rate is here to stay.
“The Chancellor did not see a distinction between tax evasion and aggressive tax avoidance, calling both "repugnant". He is pushing ahead with the general anti-avoidance rule and has made it clear that retrospective legislation may become more common.
“Availability of enhanced capital allowances for new enterprise zones is likely to give a considerable and welcome boost to investment in these areas.”
Jeremy Cape, partner at SNR Denton UK LLP
“In the current economic climate, the country needed a business and entrepreneur-friendly budget. While the cut in corporation tax is welcome, the tax relief in certain sectors like video games, animation and high-end television production seems like window dressing. There are several other sectors which need equal if not more encouragement.
“Small firms have limited resources and are stretched. Simplification of the tax system for them will certainly be helpful.
“We still need to see more from the Chancellor on how he will achieve some of the things he has mentioned, like the doubling of exports. How exactly would the Enterprise Loan scheme work?
“The reality is that business is the only engine able to power us out of the current situation. The question is: will the Chancellor pile on some fuel in the shape of real help for small business, or is he content with repainting passenger carriages and guards’ vans as usual?!”
Rajesh Agrawal, chairman and CEO of Xendpay.com
“While the reduction in the top rate of tax will be welcomed by many top earners, the justification by the Chancellor just doesn't stack up. It's highly likely that more money would have been brought in through the 50% income tax rate if it had been left to run.
“Comparing the two years either side of the rate change doesn't tell the whole story. Just as taxpayers accelerated income ahead of the new rate, they will now be deferring income until after April 2013.
“The lower top rate of income tax coupled with the reduction in corporation tax is geared towards attracting and retaining 'internationally mobile' businesses and higher net worth individuals.
“The rise in the personal allowance will make the headlines but in reality it puts just £18 extra each month into a typical person's pocket. Yes, this is to be welcomed in the current climate but it's by no means a game-changer for people on average incomes.
“Although the age-related pension allowances aren't being taken away from those who already have them, tomorrow's pensioners won't get the additional tax relief that today's pensioners enjoy. Expect more cutbacks like this in the future as the economy feels the adverse effects of an ageing population.
“In cutting corporation tax to 24% next month and offering further reductions moving forward, the government is dangling a carrot in front of international investors and companies to persuade them to relocate to the UK.
“The stamp duty change is a further tax on London and the South East and could reduce transaction levels at the higher end of the property market. Given the very low number of transactions at this end of the market, the extra revenues generated will be relatively modest.
“But with the reduction in the 50p income tax rate it will earn the government some political goodwill. The Chancellor's bullish clampdown on buying high end property through corporate entities will be widely applauded.
“While this will doubtless catch many of the people the Chancellor is targeting, there will need to be extensive exemptions if it is not to damage genuine investment in UK property, particularly for redevelopment.”
Tony Bernstein, senior tax partner at HW Fisher & Company
“This could be seen as the 'entrepreneurs Budget'. It includes a number of initiatives to support British entrepreneurs and small businesses, including encouraging funding and underwriting loans through the National Loan Guarantee Scheme, as well as reducing corporation tax to 24% from April 2012.
“The Chancellor also stated in the Budget that the government intends to double the UK’s exports to £1tn this decade. This is a fantastic opportunity for UK businesses to pursue overseas opportunities and offset faltering levels of UK consumer spending.
“At DHL Express we are carrying more UK products around the world than at any time in our company’s history, showing the increased appetite for great British goods globally. The suggested fiscal initiatives in the Budget could present an opportunity for UK entrepreneurs and small businesses to kick-start their exporting schemes and tap into the potential of emerging markets.
“The Prime Minister once said that if we could boost the number of SMEs that sell overseas from around one in five to around one in four, we could potentially add £30bn to the UK economy. We must do all we can to encourage and support our business people and entrepreneurs to think global and sell their wares to the world.”