Yorkshire responses to the Autumn Statement 2014
The Autumn Statement has provoked intense debate today, from fracking and the raising of the pensions age to investment and start up loans. Bdaily have put together a selection of comments from Yorkshire businesses and commentators on the Statement in general, and in their own particular areas of interest.
Yorkshire tax partner, Tim West of Ernest & Young said: “Having focussed so much on the continuing need to repay the debts of the past, many might have expected Osborne to be Mr Scrooge.
“Instead we have received gifts from Christmas Past, Christmas Present and Christmas Future. Businesses and consumers were today delivered cuts in fuel duty (the choice of many a past Chancellor), cuts in energy bills (the issue of the moment), and lower business rates for the future (starting next year).
“In an Autumn Statement that was ostensibly neutral over the next six years, through spending cuts offsetting tax changes, the Chancellor nonetheless created a Christmas Stocking of over £11 billion through using the money saved on spending and raising over £9 billion from tackling tax avoidance and increasing the levy on banks.”
“By spending over £1bn next year on Business Rates, the Chancellor has shown that he has been listening to the pain felt by businesses through a system that has its origins in the Poor Laws of 1601 and was updated in 1990 alongside the introduction of the poll tax.
“By capping the increase next year at 2%, as well as extending small business relief and introducing a measure targeted at lower rated retail properties, the Government has reduced the immediate burden.
“However, the commitment to a review for change in 2017 is arguably as important for driving growth for businesses in the UK – getting the system to be one that drives entrepreneurship, and investment, rather than a being millstone that constrains business.
“The announcement focuses on options for longer-term administrative reform and many will be arguing that review needs to be both accelerated and more fundamental.”
Richard Wright, executive director of Sheffield Chamber of Commerce, said: “This is a relatively positive statement for business, touching on tax burdens, exports, infrastructure, enterprise and apprenticeships, as well as providing specific support to the retail sector.
“By revising up growth forecasts from 1.8 percent to 2.4 percent for 2014, we should provide a needed confidence boost to companies. The Government is aiming for growth to be at 2.7 % by 2018 and while we should be aiming higher than this, it will provide the stability business owners need when looking to invest in the future.
“We welcome the Government’s decision to double export finance to £50bn to help increase international trade with growing emerging markets around the world. It will now be crucial that this funding reaches the businesses quickly and effectively to see through an increase in exports.
“Christmas and New Year is always a critical time for retailers and so it is good to see the Chancellor has put in place measures to increase business on our high streets. The discount to retail premises with a rateable value of up to £50,000 will be excellent news for many, as will the reduction by half of business rates for new occupiers. This will assist more independents to be developed across the city region in 2014.
“The cap on the rise of business rates to two percent is another step in the right direction, as to is the 12-month extension on the small business rates relief and the cancellation of next year’s fuel duty rise.
“The £1bn in loans to unlock housing developments across the UK, the support to help companies financially to increase apprenticeships and assisting 50,000 more people start their own business, is also positive.
“But as always the devil will be in the detail in these schemes and we hope businesses will not be let down by a failure to deliver on these initiatives quickly and allow them to help meet the new growth forecasts now set.”
Richard Wackett, National Head of Rating at Lambert Smith Hampton (LSH), said: “The Government has missed the opportunity to reform the outdated business rates system, which would reduce the Government’s administration burden, allow them to settle appeals more efficiently and remove artificial barriers to further development and growth.
“The proposed measures will complicate an already complex regime and avoids addressing the more fundamental reform required by business occupiers.”
“This is unlikely to make a significant difference to the viability of the business and much more radical changes to the rating system are required if they are to have any real impact on rates bills that are perceived by many to be crippling both industry and the High Street.”
Richard added: “The Chancellor should have made the most of the fragile, but real, signs of recovery by relieving business of punitive and increasingly regressive taxes on commercial buildings.
“There are a series of small measures designed to assist business, although these are minor including a promise to clear all outstanding 2010 rating appeals by July 2015, the spreading of rate payments, the extension of small business relief and an important acknowledgement that the market needs a ‘kick start’ through a 50% new occupation relief for previously vacant commercial and industrial premises.”
Andrew Baxter, Managing Director of Europa, a UK transport company who has just opened a new branch in Wakefield, has welcomed the freezing of the planned fuel duty rise announced in today’s Autumn Statement as “delivering significant benefits to the British freight industry.”
He added, “At last, the Government has recognised the need for this kind of relief – not just for businesses but for consumers too, who have felt the knock on effects as higher transport costs have led to rising prices further down the line.
“For too long the British freight industry has been unfairly penalised by high fuel costs. While the recent fuel duty freeze has gone some way towards helping to minimise rising operator costs, this has been against a backdrop of a struggling UK economy – to say the least.
“Now we must hope that the tentative growth of the economy, coupled with the measures announced today, spell a brighter future for the UK haulage industry.”
Richard Little, tax partner at KPMG in Leeds, said: “Businesses were Autumn Statement winners with enough positive measures announced to ensure that, if not quite an early Christmas present, the speech was certainly not a turkey. “There was little tinkering around the edges and some welcome targeted measures to provide relief. In particular the Chancellor has obviously listened to the SME community and delivered on key areas such as skills, business rates and access to finance to help them grow, such as the capping of business rates with specific reliefs for small retailers and an extension of film tax reliefs, plus some allowances for the oil and gas sector. “The surprise measure though is the removal of employer’s NICs completely for 16 – 20 year olds. Most SMEs now pay more in National Insurance Contributions (NICs) than they do in Corporation Tax so this announcement will be most welcomed by the SME sector as it will reduce the costs to business and hopefully in turn support job creation. “The business community will also be happy with the commitment from the Chancellor to investment in major infrastructure projects and up-skilling our young people, which will in the long term create an environment for this region’s businesses to compete effectively on the world stage.” “However, it’s a shame that the Chancellor again passed up the opportunity to introduce tax relief on capital investment which is a measure that many businesses have called for and is arguably the remaining missing piece in the jigsaw to completely transform our corporation tax regime.”
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