Member Article

North East business leaders give their views ahead of the Budget

Ahead of this afternoon’s Budget, a group of North East business leaders give their views of what they want to see from the Chancellor George Osborne.

Chartered surveyors at Sanderson Weatherall are calling for a re-think on business rates and an increase in stamp duty in Wednesday’s Budget.

Richard Farr, a Partner at the firm, which has offices in Newcastle and on Teesside, said: “The Government decision to delay the re-basing of business rates from 2015 to 2017 is going to hit many smaller companies who will have to pay out on the basis of values set at a peak time. George Osborne can do a lot of good by reversing this decision at the Budget.

“Additionally, with the widespread economic benefits that increased house building can bring, increasing the threshold for Stamp Duty would assist affordability in the market, helping buyers and builders alike.”

Willie O’Neil, Contract Lead at Nortech Oil & Gas, part of the Nortech group of companies, a successful professional engineering design and project management company based at Wynyard, said: “The North Sea requires a more effective tax regime. The existing structure was created in an era of large low-cost fields when there was a strong case for taxing the economic rent which was being generated.

“A new regime should reflect the current realities. That means strong incentives for both exploration and development with upfront capital allowances. These should be extended to new companies coming in to manage late life development of the remaining reserves in and around existing fields.”

George Hardey, Senior Tax Manager at Waltons Clark Whitehill said: “As we move away from the downturn, it is vital that investment and growth are encouraged over the course of the next couple of years and beyond, whichever Party wins the next General Election.

“In a budget that is just over twelve months before a General Election, we can’t really expect to see anything controversial, as the Chancellor won’t want to hit voters too hard. It will be a budget that looks like it gives more than it takes, maybe with something to keep pensioners happy.

“For the rest of us I would expect little change but cautious hopes include a small rise in the Personal Allowance now that it has reached the promised level of £10,000. A small rise in the higher rate threshold may also be forthcoming, though any change in the top rate of tax of 45% would be unexpected.

“However, the key has to be the encouragement of growth and investment in businesses. Taking the foot off the gas in terms of growing the economy could well prove fatal in the run up to the election and I would like to see a reduction in National Insurance contributions and the simplification of corporation tax, with a possible cut to 18% or 19% making the UK’s corporate tax regime increasingly attractive to incoming businesses.”

Rachel Turnbull, Chief Executive of TT2 Limited, the company which operates the Tyne Tunnels, said:

“Road connectivity is of key importance to the North East economy, both internally and in relation to the rest of the UK.

“What we would like to see in the Budget is a commitment to ensure key projects are carried out as a priority. These include important infrastructure improvements to facilitate traffic flow at key interchanges North and South of the Tyne Tunnels on the A19, at Silverlink and Testos.

“Individual improvements to the road network can only go so far in maximising the potential of investment in infrastructure. However, by looking at the issue holistically a bigger difference can be made for the good of the region.”

The founders of Growthfunders, the North of England’s first online equity crowdfunding platform, are calling for the Chancellor, George Osborne, to provide a boost for new businesses in Wednesday’s Budget. Craig Peterson, co-founder of GrowthFunders, highlighted two ways in which start-ups could be given a helping hand.

He said: “First, to encourage growth, the Chancellor can help create a better economic environment for employment among newer businesses by introducing a reduced rate of National Insurance for businesses in their first five years of operation.

“Second, funding for start-up businesses is vital, so we would like to see an extension of tax breaks for seed capital investment. An increase in the relief threshold for SEIS compliant investments, from the current level of £150,000 to £250,000 will not only make such cash injections more appealing to investors, but also give the recipients a stronger platform on which to build their business.”

Mike Odysseas, Managing Director of Odyssey Systems, said:

“Small businesses are still shouldering too heavy a tax burden. It was great that the Government decided to extend the small business rate relief scheme for another year, but this simply isn’t enough to nurture the green shoots of recovery which are now apparent.

“To enable businesses to maximise growth, I would like to see an indefinite extension of the relief scheme, which would alleviate financial strain and facilitate economic progression.

“The corporation tax cuts we have seen George Osborne make so far have mainly benefitted the 80,000 larger businesses in the UK, rather than the 1.5 million SMEs which make up the bulk of the economy. I’d like to see this balance redressed with a bit of tax relief for smaller companies which would give the UK a real and tangible economic boost.”

Rob Theakston, Managing Director of the Black Sheep Brewery, is calling for a freeze on beer duty from Chancellor George Osborne at this year’s Budget.

Beer duty has increased over 40% in the last four years and, since 1990 there have been 20 increases imposed on drinkers. The UK pays over 40% of the total EU duty bill while only consuming 13% of the total beer volume. The government made a good start last year by scrapping the beer duty escalator and a historic cut on duty, however beer in the UK remains hugely overtaxed.

Rob said: “We are starting to see the green shoots of recovery in the economy, and the British beer and pub industry is a key part of this. A freeze on duty would continue the positive momentum from last year and help secure jobs in the sector as well as supporting over taxed brewers and give a fairer deal to the pint buying public.

“Unless the Government is aiming for beer to become a luxury commodity, continuing sense needs to be taken on this crippling tax.”

Jeremy Middleton, CEO of investment firm Middleton Enterprises, said: “I would urge George Osborne to encourage investors to look towards social enterprises, by setting tax relief incentives. This would be likely to increase the level of investment in social enterprises, which would have a particularly dramatic impact in the North East, where there are thousands of social enterprises which currently find it difficult to raise funds.

“Tax incentives, along with new sources of funds from sources including the Northern Rock Foundation, could completely change the landscape and facilitate the growth of business with a social conscience, helping wider economic growth in companies which make a real, sustainable and tangible difference to people’s lives.”

David Copland, General Manager, Marketing & Communications at Darlington Building Society said: “I’d like to see measures announced in the Budget that would benefit savers. The Government can stimulate the savings market by increasing the ISA limit and introducing new ISA products for first time savers to encourage investment.

“Anything that increases individuals’ discretionary spend has to be good for the economy, whether through tax or NI cuts.

“Finally, it is time the Government looked again at the stamp duty threshold, particularly to help first time buyers get on to the property ladder.”

This was posted in Bdaily's Members' News section by Middleton Enterprises .