Spring Budget 2017: North West business leaders react

In delivering his first Spring Budget as Chancellor, Philip Hammond highlighted how the UK’s economy was the second-fasted growing in 2016 among the G7 nations, with the growth forecast for 2017 upped from 1.4% to a slightly more robust 2%.

These facts, paired with new figures claiming that 650k more people will be in employment by 2021, seem to paint a rosy picture of Britain’s economic landscape as it prepares to leave the EU.

But opinions on the speech from across the North West were nevertheless mixed.

Here’s what the region’s business community had to say:

Laura Thomas, Businesscomparison.com

“Decisions made by the Chancellor today will be quite rightly scrutinised by the small business community who stand to be affected as politicians begin the process of withdrawing from the European Union.

“The steps towards making business rates fairer including a monthly cap, reduction for pubs and discretional relief are to be welcomed. A smoother and fairer system has been promised before the next revaluation and it will be interesting to see what changes will be made to support small businesses.

“The Chancellor showed he had listened to the concerns of SME owners regarding the digitalisation of quarterly reporting by delaying the deadline. One massive area of concern for sole traders and self-employed workers is the extra tax imposed on them and the class 4 National Insurance Contribution increase from 2% to 10% in 2018.

“As the Chancellor has learned with the digital reporting and business rates furore, what appears to the Government to be small changes to the way entrepreneurs operate can have massive implications for the financial wellbeing of individual businesses particularly at a time of economic uncertainty.”

Jade Chan, Hill Dickinson

“Today’s Budget was, from a tax point of view, relatively low-key with many of the changes such as the increase in personal allowance and increase to the higher rate threshold already expected. However, there were a number of announcements which could have an impact on our owner-managed business clients and other SMEs in the north west region.

“In brief, Class 4 national insurance contributions for the self-employed will be increased from 9% to 10% in April 2018, and to 11% in April 2019. This, sitting alongside the reduction in the tax-free dividend allowance from £5,000 to £2,000, will undoubtedly be felt by owner-managed businesses and director / shareholders. There were some small wins however, in relation to business rates with the Government announcing that those coming out of small business rates relief would have their rates increase capped at £50 per month, and also a £1,000 business rate discount for 90% of pubs.

“But this will be of little comfort to our larger business clients who will still face a 6% rise in business rates from the 2010 revaluation.

“Overall, it appears that the Government is trying to seek parity between the employed and the self-employed by taking away tax advantages for self-employed individuals, but what we don’t want to see is the introduction of these measures leading to would-be entrepreneurs being discouraged from taking that first step in business (which is inherently more risky than employment), and a down-turn in entrepreneurial activity in the north west as a result.”

Martyn Kendrick, Lloyds Bank Commercial Banking

“Many companies will welcome the Government’s commitment to boosting skills among 16- to 19-year-olds through the creation of ‘T-levels’.

“Businesses have found it difficult to access people with the right training and skills, with our latest Business in Britain report showing that nearly a third of North West companies that recruited in the second half of 2016 had difficulty finding staff with appropriate skills.

“The new ‘T-levels’ will particularly help construction and manufacturing companies across the North West, helping to provide both employees and employers with the specific skills that they need to thrive.

“The Chancellor’s continued commitment to the North’s transport infrastructure through a new £90m fund will also be key for the region’s firms, and many will welcome the plans to improve connectivity to the rest of the UK.

“Companies will also have been monitoring changes to business rates to see how it will affect them. Although they will not get full clarity until the announced consultation, the three measures that were confirmed will have been well-received by some small firms.”

Tony Medcalf, Moore and Smalley

“As predicted, this was a more sober budget than in recent years. Mr Hammond focused more on the figures, than the headline grabbing policies.

“There were concessions on business rates, meaning those facing the biggest increases following the revaluation can apply for relief funding. This will be welcomed by those businesses facing the biggest increases.

“There were delays announced in the introduction of the digital tax regime for businesses under the VAT threshold, which will benefit the smallest businesses.

“On the downside for self-employed people, they are going to be paying more National Insurance Contributions, as the Chancellor announced plans to bring contributions for the self-employed closer in line with employees.

“On sector support, he announced a further £270m to keep the UK at the forefront of disruptive technologies like biotech, robotic systems and driverless vehicles, which will hopefully have some benefit to the advanced industries sector in Lancashire and Cumbria.

“I think the business community will be largely underwhelmed by this budget which was light on business content, but at the same time business owners may welcome not having more government changes thrown at them.”

David Bailey, Napthens

“We welcome the news that the Chancellor has listened to the concerns of the business community.

“Business rates can be a big issue for many businesses, particularly SMEs and those landlords facing long periods of a property being empty.

“It’s good to see that the licensed trade is being given specific relief as this is a sector that has publicly struggled in recent years, and while it looks many like most areas should see reductions in business rates, we welcome the fund to deliver support to what the Chancellor called ‘hard cases.’

“However, as always the devil is in the detail, and we have already been told by the Chancellor that cuts in tax in one area will likely be matched by increases in others.

“What these announcements will mean for businesses in the long term is difficult to predict, and as yet we don’t have full details of how the reform of the system, or the allocation of funds via the new discretionary relief system, will work.”

Robert Downes, Federation of Small Businesses

“FSB welcomes the fact that the Chancellor has listened to the small business-led campaign on business rates. The £435m of new money is a direct and much-needed response to those facing astronomical hikes in their business rates – particularly those facing many in the nursery sector we’ve been made aware of in Greater Manchester.

“This immediate relief is vital in the short-term, and action on more frequent revaluations will also help. But this tax remains out-of-date, so believe only a cross-party Commission can create a simple, fair tax system for a modern economy.

“Mr Hammond announced that he would take forward FSB’s proposals to help the self-employed in the benefits system. We look forward to working with him on what this may mean for maternity benefits and paternity leave.

“However, the National Insurance rise to 10% next year and 11% in 2019 should be seen for what it is – a £1bn tax raid on those who set themselves up in business. This undermines the Government’s own mission for the UK to be the best place to start and grow a business, and it drives up the cost of doing business. Future growth of the UK’s 4.8 million-strong self-employed population is now at risk. Increasing this tax burden, effectively funded by a reduction in corporation tax over the same period, is the wrong way to go.”

Jane Parry, PM+M

“The Chancellor’s opening statement about productivity still being too low, families feeling squeezed, the need to make Britain ready for its ‘global future’ outside the EU and having an economy that ‘works for everyone’ was all pretty standard stuff which no-one would really disagree with or be surprised by.

“That tone ran through a Budget that was clearly designed to reassure the markets as we approach the triggering of Article 50.

“The announced changes in the tax regime were all expected including the upcoming changes in Corporation Tax.

“His comments on Business Rates gave clarity but it wasn’t a surprise that they won’t be abolished. However, his unveiling of three measures to help those affected (no business losing small business rate relief will see its bill increase next year by more than £50 a month; 90% of local pubs will have a £1,000 discount on their business rates bill; and a £300m fund for local councils to offer discretionary relief for hard-hit cases will be launched) is good news.”

Rob Garbutt, LDeX Group

“We’re pleased that the government recognises that removing connectivity barriers for businesses is absolutely necessary to tackle the productivity gap in the UK. In today’s digitally-focused economy, fast and reliable broadband isn’t just a benefit for organisations – it’s crucial.

“The government’s pledge to dedicate £316m to full fibre broadband and 5G technology is an important step in providing businesses with the foundations they need to innovate and succeed.”

Mike Perls, Institute of Directors (North West)

“Today’s Budget goes some way to address the concerns of businesses here in the North West who have been facing uncertainty about the future since last year’s historic Brexit vote. We hope that the announcements including measures to improve the impact of business rates reliefs and investment into local broadband networks will help to boost confidence and encourage our members to continue with investment into their businesses, which will in turn enable the continued growth of our regional economy.

“In relation to this, the re-commitment to the the Northern Powerhouse and investment into road infrastructure in the North is welcomed by the IoD, as it signals the Government’s priority for the continued development of the region.

“Additionally, we support the measures which will stimulate investment in training, particularly for young people. It is essential that the Government continues to talk to businesses, both here and throughout the UK to identify where the skills gaps are and how training is best placed to meet the needs of the local economy.

“Finally, we welcome the announcement of a business rates consultation which will help companies in the North West who have been feeling the pressure from last year’s revaluation. These measures, including the fund for local councils to offer flexible, discretionary assistance should work hard to help companies bring forward productivity-boosting investment.”

Dr Gordon Fletcher, University of Salford Business School

“The last Spring budget offers few surprises. The Prime Minister and Chancellor had both shared enough of the detail of the budget to effectively soften the blow.

“It is perhaps an obvious statement but this budget reflects some form of acknowledgement by the Government that there is very little margin in the accounts. Many of the key messages from the budget are relatively small in their pound value but also reflect the inherent difficulty of maintaining internal consistency.

“The budget also hints at the challenge of planning for the future while also maintaining current infrastructure. In the budget there is both a commitment to building new roads and alleviating existing congestion while also supporting driverless technologies and autonomous vehicles. Which of these issues require priority is not clear in the budget.

“The tension between digital and high street retailer is also accentuated in the budget. With an increase in business rates, purely online retailers will effectively benefit from operating in a remote warehouse while retailers on the high street will struggle with further cost against declining incomes.

“The increase in national insurance rates for the self-employed appears to be a potential disincentive to entrepreneurial activities. This rates rise is a contradiction with the acknowledgement that technical education requires increased support.

“However, the introduction of T-Levels will be by no means be a guaranteed solution to this skills shortage. A number of previous budgets have attempted to introduce new awards and delivery mechanism with minimal success against our underlying cultural preference for A-Levels.”

John Keyes, Cushman & Wakefield

“I think the Chancellor’s upbeat message on the resilience of the economy is echoed in the level of development activity we are seeing in Manchester and in other parts of the region. The commitment to an Industrial Strategy and support for Science and Innovation is also potentially good news for us given the strength of our regional Universities.

“Most commentators were expecting more movement from the Chancellor on Business Rates but as rates increases due to revaluation was largely a London and South East issue, this is probably a positive for our region, where more have gained than will have lost out.

“The Chancellor offered more support for social care and for the NHS to support Sustainability and Transformation Plans (STPs). While there are questions about whether this is enough funding to meet the challenges, the key will be for our health organisations, local authorities and partners to secure a fair allocation of funding and to use it to deliver positive change. I hope that Greater Manchester, with devolved health and care funding, will be amongst the first areas to receive the new capital funding announced.

“Putting technical qualifications on an equal footing with academic ones is long overdue. There are questions about whether the funding provided is sufficient to meet the government’s ambition but the further education colleges and stakeholders in the region need to work together to ensure benefits for the region are maximised. This will test the more collaborative approach promoted through the recent Area Review process.

“Our region has a track record of working together across public bodies and the private sector and this needs to continue and be expanded to secure the benefits arising from this Budget.”

Adam Burke, Colliers International

“The Chancellor’s Budget announcement on business rates is too little, too late. It is not the ‘Budget for business’ that the Chancellor wants us to believe, all the time he proposes swingeing rates’ increases for thousands of firms. Yes, for small businesses coming out of Small Business Rate Relief (SBBR), this Budget will offer an olive branch, but will not delay the inevitable increases coming down the road.

“We are still awaiting the Government’s response on the last review on business rates reform. Yet another review, announced today, into business rates is a waste of time and money. It is absolutely clear that more frequent revaluations – even, three-yearly – would go a very long way to improve the current system.

“Although on the surface, a rates discount for pubs seems a positive step, it is only for ‘small pubs’.” European State Aid rules limit the amount of discount any one company can receive from Government. For larger pub chains, which may have already received Government support, this new discount is simply a fiction.

“With around 326 local authorities in England, the Chancellor’s ‘discretionary fund’ means just £990k per council to offer relief to businesses over five years. This is clearly a paltry amount given the Government has caused these staggering increases itself.

“By putting politics before business when they delayed the revaluation, the Government has created this perfect storm. The chickens are now coming home to roost. I am regularly asked: ‘who are the real winners and losers?’ The real answer is that there are only losers.

“The big losers are those firms in London and the South East about to get the largest rates’ increases seen in a generation. But also losing out significantly are those businesses in depressed areas of the country who are not seeing their rates’ bills go down nearly quickly enough.”

Haydn Rogan, tax partner at Weightmans LLP

“Mr Hammond has reacted to widespread criticism of the unrealistic implementation timetable for quarterly digital tax returns and a one year delay for small businesses with a turnover beneath the VAT registration threshold should give them more time to prepare but does not address the fact that the issues do not just relate to the size of the business.

“A lack of public awareness of the new requirements and the necessary IT infrastructure is also the real issue that needs to be addressed.

“Many individuals and businesses we have been speaking to are either not aware of the new requirements, or aren’t ready for the change.

“We’d call on the Government to do more to communicate what firms need to do to comply and prepare for the changes.”

Noam Handler, EY (North West)

“Business rates featured today in a budget with very few tax changes, but even here the changes were small and focused on the smaller business community. Following furore over the increases arising from the revaluations, the Chancellor announced a discretionary support fund, some targeted support for Small Business Rate relief recipients and a special £1,000 discount for small pubs.

“These changes will be welcome by those receiving them, but they still don’t address the underlying tax hike – from the 41.4% rate imposed at the last valuation to the 48% rate coming into force in April. Large businesses, which have had little help in either this or the last Budget, still face some of the highest property taxes in Europe. Given that business rates are paid even before a single pound of profit is made, this can act as a real deterrent to UK investment.

“The Chancellor hinted that he would be looking at “a better way of taxing the digital part of the economy” in the medium term, but gave no details or timeline. This was an issue ducked by his predecessor in the recent consultation on reform, so perhaps he was wise to avoid committing himself.

“So those pint-pulling publicans may well be happy, but online shoppers have been warned! As for larger businesses, in was another dry Budget.”

Debbie Tagoe, Greater Merseyside Learning Providers’ Federation

“The government’s multi-million pound drive to improve vocational and technical education is a welcome announcement in today’s Budget. Investing in our home-grown talent will ensure a more skilled, knowledgeable workforce for the future, which is all the more urgent with the decision to leave to European Union.

“Going to university has become an expected rite of passage for many young people, with apprenticeships and technical routes often seen as the lesser alternative. Attitudes are slowly changing as more pupils with high attaining GCSEs and A-Level grades choose the apprenticeships route. Hopefully this latest reform will give vocational education the level of esteem it truly deserves.

“Working as a delivery partner on the Apprenticeship Support and Knowledge for Schools (ASK) project, we’ve been able to raise awareness of the apprenticeship routes to employment, which is so important if we want to foster a culture of skills and productivity.

“Employers have been warning of the ‘skills shortage’ for some time, so these reforms are long overdue. It is important however, that the government works with apprenticeship providers on a local level to ensure the implementation is right and that there is equal access for all. As well as providing the training for Apprenticeships, GMLPF members also administer tailored one-to-one assistance to apprentices, helping with the achievement of maths and English qualifications if necessary; as well as offering personal support and guidance along the way. The success of Apprenticeships and technical routes into employment is dependent on the critical role skills providers play.

“Skills providers are the vital link coordinating and meeting the needs of employers and students so it is essential their input is considered and valued.”

Alan Price, Peninsula Employment Law

“Employers were avidly watching Philip Hammond’s final Spring Budget to stay abreast of any important employment law changes.

“The Chancellor used the speech to confirm income tax personal allowances will increase to £11,500 with the higher rate threshold increasing to £45k from April 2017. He also repeated the commitment to raise the personal allowance to £12,500 and the higher rate to £50k by the end of this parliament.

“The most significant employment law initiative was the announcement of return to work support, or ‘returnships’. The government will be granting £5m of new funding to the public and private sector to help people back into employment after a long career break. Whilst this is most likely to affect women who have had a break from work due to family reasons, the support will be available to both men and women.

“Employers will also have to get used to seeing T-levels on application forms in the future. From 2019-20, there will be 15 clear career focused technical education routes which double the number of hours of training for 16-19 year olds. The aim of T-levels is to ensure young people have the technical skills to enter into the workplace.

Ed Dwan, BDO

“Before Hammond stood up today, nearly a third of the business leaders we’d surveyed had wanted to see a moratorium until 2020 or when Brexit negotiations are finalised (whichever comes first) on any tax changes that do not simplify the system.

“What he actually focused on was the much-talked-about gig economy with the aim of providing equality across those who are self-employed, those paid through limited companies and people who are employed through increases to NI and a reduction in dividend allowances. It doesn’t quite seem to take into account the additional risk taken on by those who are not employed traditionally.

“The UK tax code is almost 20k pages long - making it more than 16 times as long as the first edition of War and Peace. Businesses have cited the sheer scale and complexity of compliance as a major obstacle to growth so the fact no huge changes were made has given businesses some stability in uncertain times.”

Phil Foster, Love Energy Savings

“It is true, that the economy has experienced more robust growth than expected since the Brexit announcement last year, but we fear this may be short term.

“In the longer term, with productivity and skills remaining below par when compared to other G20 nations, we have a lot of ground to make up if we are to become a competitive nation. This uncertainty is confirmed by the revised down OBR forecasts for 2019 and 2020, which now fall more in line with Bank of England predictions.

“Business rate measures announced today, on the surface, seemed generous, but we must remember that they come in the wake of the backlash that faced the last revaluation. Small business owners will benefit from the £1,000 reduction, the £50-a-month cap for those leaving rate relief, and a £300m relief fund respectively, but the self-employed and members of the digital economy are set to experience some turbulence.

“On a brighter note, we’re thrilled to see that decentralisation will continue, with May seeing the election of six mayors for different regions, allowing them to “take control of their economy destiny”. The strategy for the Midlands Engine, as an accompaniment to the Northern Powerhouse will be released tomorrow and we’re looking forward to seeing the government’s plans.

“Working in the energy sector, we are acutely aware of the differences experienced between regions. Allowing more local control will result in better tailored policy and a more effective use of resources. “

Jodi Birkett, Deloitte (North West)

“The roll out of 5G connectivity was one of this year’s TMT Predictions from Deloitte and it is encouraging to see the government taking tangible steps towards implementing this across the UK. If our tech industry is to really stamp its mark on the global stage fast connectivity is essential, and the £316m fund for fibre broadband and 5G is very positive news.

“The North West in particular is perfectly positioned to take advantage of wide-spread next-generation connectivity. We have already seen the benefit of a strong support network in the region’s tech clusters and these two things combined will create a force to be reckoned with.”

Richard Roberts, Brabners

“In the lead-up to the budget, organisations across the country were hoping for more details on how the government would cushion the blow of the business rates revaluation. To an extent, that’s what we got. The Chancellor’s three-point plan, aimed at helping certain smaller businesses and those hardest hit, will be some comfort to SMEs in the South East that were fearing tax increases of up to 70%.

“The Chancellor also acknowledged that the current system disproportionately favours digital businesses. But, disappointingly, we’re still waiting for clarification on how this government will make taxation fairer for bricks-and-mortar retailers. The link between rate and property value will continue to affect high street retailers more acutely than ecommerce companies, which can house their operations outside of property hotspots.

“Significant concerns will also remain for SMEs in high street locations who rely on bigger brands to drive footfall to the area. Those larger operators – who are unlikely to benefit from the measures announced – may still choose to exit sites where rates rises make that store unprofitable. This will leave remaining retailers with one less flagship business to attract customers to their parades.

“Ultimately, the revaluation will still be a headache for a lot of businesses that fall outside of the rate relief threshold or those which aren’t accounted for in the government’s new three-point plan. For those companies, regions like the North West, where rates are due to fall or see marginal increase, will become an increasingly attractive and more viable option.”

Liz Draycott, Legat Owen

“Given the £25bn+ revenue generated by Business rates, the £435m relief package is really insignificant especially when businesses across the country are crying out for support, particularly in the retail sector. The measures seem to fly in the face of government desire to grow business in the UK and doesn’t do enough to support those hardest hit by tax hikes.

“In reality there has been very little change for business rates. Only three points were detailed as reliefs for businesses:

“First, there is to be a cap on increases due to businesses losing small business rates relief SBRR set at £50 per month or transitional relief whichever is the higher. Secondly there will be a £1,000 discount for all pubs with RV’s less than £100k; 90% of pubs fall into this category.

“Finally the Chancellor announced a £300m discretionary fund to councils for hardship case. So, in total £435m rates relief have been offered but no comment made about further retail reliefs so desperately demanded by many retail groups and property organisations up and down the country.

“The Government is still driving the idea of devolution to the regions but as it has not really benefitted Wales, questions have to be raised if there any benefit to be had for northern regions especially. London gets six times investment compared to north east for example, how does this tie in with devolution and Northern Powerhouse?”

Conrad O’Neill, Canning O’Neill

“The measures to help small businesses and pubs are welcome but nothing has been done (or is ever likely to be done) about the North/South gap that exists in the business rates world. The Revaluation was postponed from 2015 to 2017. This was to protect businesses in the South east, where rents had increased, from business rates rises, but served to keep business rates in the rest of the country, and in particular the North, where rents had decreased, at artificially high values – so business rates payers in the North have been subsidising business rates payers in the South for two years.

“On Revaluations, the Government implements Transitional relief – which phases in increases in rates bills so businesses are not faced with immediate steep increases. What many may not appreciate is that transitional relief also applies to decreases in rates bills. So the South East will have their long overdue increases phased in and the North will have their long overdue decreases phased in – so the North will continue to subsidise the South East for a few more years to come.

“Meanwhile, we continue to talk, and talk, and talk about the Northern Powerhouse!”

Martin Hall, ICS

“There was little mention of IR35 in the public sector during the Budget, the new legislation will be implemented next month as planned, without delay. One minor addition is that the fee payer has the option to consider a worker’s expenses when making a payment to a personal service company inside IR35.

“The aim is to ‘level the playing field’, which means they want to ensure anybody doing a job, regardless of whether they are self-employed, employed or have their own company, is paying the same tax. The increase in National Insurance for self-employed and the cut to the dividend allowance are examples of this.

“On a more positive note, a number of SMEs will be relieved to hear about the solution to the impending rises in business rates, as Mr Hammond announced £435m of measures to help ease the impact of the rates rise on pubs and small businesses.

“The issue of tax avoidance also came up. Which, of course, is a talking point in our industry, as there is always the chance that people will hear ‘less tax’ and quickly sign up to such a provider, but they might not necessarily understand what exactly it is they have signed up for. Therefore the clampdown is a much-needed development and it’s important that people know who they’re working with, and that they are compliant.”

John Whittle, Unshackled.com

“We welcome the announcements that the Budget will take companies to task that have complex terms and conditions and contracts which tie people in. For too long, consumers haven’t had access to fair and transparent deals. In our industry - the mobile phone sector - we see people tied into long contracts with allowances way above their needs and no freedom to change when they want or need to. Many are even unsure as to the terms they’ve signed up to, when the contract ends or even how they can end it.

“But clarity shouldn’t be at the cost of convenience for the customer. In many ways it’s a shame the Government has had to step in. Consumer-facing companies need to make it simple for time-poor customers to make the right decisions for themselves.”

Lee Murphy, Pandle

“Despite the pound hitting a seven-week low in anticipation of the Spring Budget, Hammond’s plans to bolster the UK economy in light of Brexit are encouraging. By lowering corporate tax to 19% from April this year, the UK will enjoy the lowest corporate tax rate in the G20 and it’s likely that we’ll maintain this lead as the rate will fall to 17% by 2020.

“This should scupper the fears that businesses won’t be looking to set up in the UK once we leave the EU as we’ll continue to foster a healthy environment for businesses to prosper.

“Building upon this, the news that business rates will be cut by £435m is to be welcomed by the business community. By providing SMEs a deal like this, the Government is safeguarding against any potential hindrance of growth as we enter Brexit negotiations, and furthermore, the measures will allow these enterprises to thrive and contribute much more to the economy as they expand.

“Additionally, quarterly reporting will be delayed for businesses with a turnover below the VAT threshold. This announcement was somewhat expected given how rushed Making Tax Digital has been, and as businesses which are VAT registered currently report quarterly anyway, this delay will be a great way to test out the new system before smaller businesses are tasked with the challenge of implementing it into their operations.”

Richard Thomas, DTM Legal

“This afternoon’s announcements contained some pleasant surprises: the reduction in public borrowing and the growth figure increase being most welcome.

“It’s good to see that the Chancellor has heeded the pleas from SME’s to soften the blow that the business rates revaluation will cause and the cap of £50 on any increases for business that lose the relief next year will result in many less unhappy business people, albeit it is not clear whether this protection will continue beyond next year.

“A review of the overall system is definitely going to be received very positively. It will also be interesting to see how Local Authorities divvy up the £300m that has been set aside for hard pressed cases in their local areas.

“The Chancellor has taken some measures to address the skills gap and I agree that increasing the training of technical students aged 16-19 and introducing work placements for them is a good way to do that. Current employment is at an all-time high but low productivity remains an issue so we still need to ensure young people are well equipped with a relevant skillset.

“I’m sceptical about his taxation plans for the self-employed. Despite stating that entrepreneurs and innovators are the ‘life-blood of our economy’ the Chancellor has chosen to implement an 11% rise (9% to 10%) in NI for the self-employed next year and a 10% rise (10% to 11%) the following year. A complete breach of the Conservatives’ manifesto promise and actually generates buttons in the grand scheme of things.”

Colin Tice, Cassons

“The number of self employed has increased significantly over recent years, meaning they have become a target for tax increases.

“In what appears to be a clear breach of the Conservative Party 2015 election manifesto not to raise certain taxes or national insurance, the main rate of class 4 national insurance will increase by 1% in April 2018 and another 1% in April 2019, costing up to an extra £350 each year.

“If you operate through a company, the tax-free dividend allowance is reduced in April 2018 by £3,000, meaning extra tax of between £225 and £1,143 for each shareholder. It appears there may well be further measures to increase the tax burden on the self employed or other entrepreneurs.

“The smallest self employed businesses with turnover less than £85k received a small bonus by the deferral of the introduction of “Making Tax Digital” quarterly reporting until April 2019.”

Nick Miller, Eden Estate Agents

“It was disappointing to hear absolutely no mention of the property market from the Chancellor. An opportunity to reform Stamp Duty has been missed by the Government.

“We’re seeing a thriving market in Penrith and the wider area. However, the impact of this tax is being felt at every level of the market, as it has the unwelcome effect of dampening downsizing due to buyers’ concerns over the tax, inhibiting the purchase of second homes (in a hugely tourist orientated economy) and likewise hindering families from upsizing and leaving starter homes free for first time buyers. We’d hope to see this rectified in the Autumn Statement.

“There have been suggestions in certain quarters of the tax being transferred to the seller. This is something to resist, as it would open the door effectively to taxing capital gains on property sales. The capital gains tax exemption on main homes is one of the most valuable tax exemptions for millions of people and, as with all taxes, the transfer of the tax would merely be a way of opening up a new tax stream for the Government – just look at what has happened to Insurance Premium Tax!”

Steve Blacker, KPMG (North West)

“Business will welcome the Chancellor’s announcement in the Spring Budget to reduce the administrative burden on claiming R&D credits and tax incentives. Simplicity and certainty are key to business. However, whilst the Chancellor believes the UK regime is globally competitive, we need to make sure the UK is not complacent.

“The Chancellor could have used this opportunity to increase the value of the R&D Expenditure Credits regime. We suggested a rate increase from 11% to 12.5%, to give a net (of tax) benefit of 10%. In a competitive global market, this would have provided strong positioning for the U.K.

“Our other hope is for a more joined up approach between incentives for investing in R&D, both tax incentives and grants, with incentives for exploiting the output of R&D. Incentives that encourage investment in UK production facilities exploring the R&D will ensure businesses lay foundations in the U.K. for the long term.”

Paul Barber, R3 and Begbies Traynor

“£820m of new anti-tax avoidance measures were announced in today’s Budget. “The government needs to think more carefully about the impact of its anti-tax avoidance tools.

“Tackling the abuse of the tax system is needed, but efforts to do so should not tar everyone with the same brush. Attention should be given to how people can pay new tax demands, especially if their ‘avoidance’ is the result of a simple mistake, naivety, or poor advice.

“The receipt of an Accelerated Payment Notice (APN) can force people into bankruptcy and, in the case of businesses, put jobs and livelihoods at risk.”

Kevin Taylor, WNJ

“In a Budget of relatively little content, two of the main announcements detrimentally affected the tax positions of small businesses and company directors, as the Chancellor looked to ‘equalise’ the tax system for all individuals earning similar amounts of income.

“Class 4 National Insurance for the self-employed is set to rise to 10% and then 11%.

“The ‘new’ £5,000 annual dividend allowance (the level of dividends which can be received tax free per annum) is to fall from £5,000 to £2,000 with effect from April 2018.

“This was only introduced in April 2016 to replace the old 10% tax credit on dividends (allowing basic rate band dividends to be drawn tax free), thereby further hitting the tax position of company shareholders.

“The measures will increase the tax costs for entrepreneurs looking to build their own businesses and bolster the country’s economy, in addition to adding to the burden for existing businesses.”

Rebecca Durrant, Crowe Clark Whitehill

“In a Budget where the Chancellor was keen to emphasise that he was creating a fair, stable and competitive tax system which would be the best place to start and grow a business, those owning and running businesses were hardest hit by the tax changes.

“Increases to National Insurance for the self-employed will see businesses suffer increased liabilities from April 2018.

“In addition, those operating through a limited company will see the tax-free dividend allowance reduce to £2,000 – down from £5,000. This will mean an annual tax increase of up to £1,140 depending on the level of income.

“The changes restrict reliefs which are enormously valuable in the earlier stages of business and would seem to contradict the Chancellor’s message that he wanted to support the entrepreneur as the ‘lifeblood of the economy’.

“They are, however, an indication that the government is continuing to level the playing field for those in employment who do not have the opportunity to change the structure of their earnings. The aim being that business structure should be driven by commerciality rather than tax efficiency.”

Karen Campbell-Williams, Grant Thornton (North West)

“I think there is going to be considerable disappointment over this move – which actually runs contrary to the Conservatives’ own manifesto pledge not to increase taxes. I am not surprised that some in the entrepreneurial/ start-up community are already voicing their disappointment, as it effectively adds to the cost of launching a business.

“However, it is positive to see that the Treasury has listened to concerns over business rates and I am sure the £300m package, and the help for pubs will be welcomed.

“I am particularly pleased to hear that the government intends to both simplify and raise awareness of R&D tax relief among small businesses. In an increasingly complex world of tax rules and regulations, anything that simplifies the system is welcome.

“For too long, too few SMEs have been unaware of the relief they can claim, so anything to highlight the benefits is a good move.”

Henry Brooks, TEM Property

“The Budget provided much needed stability and we welcome the Chancellor reaffirming the government’s commitment to transport infrastructure and economic growth. Whilst the Northern Powerhouse was not mentioned as much as it needs to be, the government’s actions are speaking louder than words.

“The £300m investment for new academic research placements including 1,000 new PhD places can be a catalyst for new education investment here in the Manchester subregion to improve skills and investment, especially in the Cheshire Science Corridor like at the Tatton Estate’s Cheshire Gateway site. The £210m to attract top global talent in areas such as bioscience, quantum technologies, and space technology should allow Cheshire to capitalise on the Square Kilometre Array HQ near Knutsford.

“Similarly the Industrial Strategy Challenge Fund should allow businesses like us to joint venture with innovate academic institutions to pioneer technology in our core regional strengths like energy. Funding for designing and manufacturing better batteries should allow firms like our existing tenants Tesla to add R&D and production to the their UK investment.”

Emma Degg, North West Business Leadership Team

“Ensuring young people have the right skills and training to seek employment post-Brexit in an ever more digital world of work is key.

“The Chancellor has made encouraging noises so far – particularly in relation to technical education – so we look forward to seeing the detail of further investments.

“Even better would be a further devolution of education and skills budgets – then we really can make progress in matching up training with the skills our businesses need in the future.”

Andrew Stellakis, Q2Q IT

“With so much going on in the UK economy and politics, it doesn’t seem like two minutes ago since the Chancellor was delivering his first statement. But with Brexit on the horizon and recent plans for the Industrial Strategy only just announced, we watched the budget eagerly.

“And, while debt is still too high and productivity too low, there are certainly a few key takeaways that we’re pleased about.

“For example, the pledge for next-generation connectivity – £200m on fibre broadband and £16m on a 5G technology hub – is brilliant. The only way our economy can continue to thrive is by investing in, and being at the forefront of, better, smarter and more efficient tech.

“Plus, the Office for Budget Responsibility has raised its growth forecast by an extra 0.6%, which further supports the stability of our future economy and long-term competitiveness.

“It’s important now that more is done to tackle digital skills gaps. As the job market becomes more tech-focused, education must be refined too – and starting from a young age. I want to see digital literacy on the curriculum. The introduction of more in-depth, vocational training courses, will certainly help, but it’s time that employers step up and have more of a hands-on role too.”

Paul Bolton, Salford Professional Development

“I am pleased to see the introduction of the ‘T-Levels’, but I would question whether the investment is enough to support the UK’s needs with Brexit on the horizon, especially when you consider that the country will still only be spending the same amount on vocational education as it did 25 years ago.

“I would have also liked to see more focus also on building digital skills following on from the government’s recent digital strategy.”

Jason McKnight, Recom Solutions

“The Budget contains good news for the construction industry, with an extra £260m for school building improvements, and additional free schools and specialist maths schools.

“It’s imperative that the industry recruits young, educates younger and opens the eyes of those who will become the sector’s leaders, innovators and workforces of the future.

“The injection of £500m a year for T-levels is a step in the right direction. They will help to ensure that we can attract the best people into the construction industry and there will be opportunities for construction companies to get involved with the curriculum and provide added value to the UK’s schools.

“Sponsorship of young people working in construction companies will be an option. “We, for certain, will be looking to link up with schools in the north west to offer as much support as possible, be ambassadors for construction and offer career path presentations and opportunities for industrial placements where possible.”

Paul Kenyon, Avecto

“After the digital strategy, it is encouraging to hear that the government is attempting to address the skills gap with the introduction of a digital-specific T-level. The government has listened to industry and responded with a tailor-made solution.

“We have to focus on the workforce of tomorrow and ensure young people have the opportunity to become work-ready through high-quality work placements. We look forward to seeing further detail and will lobby hard to ensure it includes cyber security elements.”

James Blake, Hello Soda

“Today’s digitally-focused economy requires investment in development and building the necessary skills. The government’s focus on funding PhDs in STEM subjects and innovations in disruptive technology is a crucial step forward.

“In the workforce of the future, digital competency will be obligatory, so this is exactly the kind of investment that’s needed to elevate the UK’s technology sector.

“As a proud Northern Powerhouse partner, we are also eager to see the proposed improvements in transport infrastructure across the North come to fruition. Currently, the amount of time it takes to travel across the North is outrageous considering the investment pushed into high-speed transport to London.

“While we will always welcome focus on northern transport, it’s up to private sector and government to move into the execution phase to make these plans a reality and support growing businesses across the region.”

Russell McGrath, Jumpstart

“Making the application around the R&D tax credit scheme more straightforward can only be a good thing for businesses across the UK. This will help to ensure continued innovation across multiple sectors, such as manufacturing, engineering and the creative industries.

“Jumpstart previously stated that the UK’s exit from the EU could bring about a subsequent ‘loosening of the shackles’ which bind us when it comes to R&D tax relief, and it looks like this is indeed the case.

“Jumpstart feels that the format and structure of the Advance Assurance Scheme is an ideal platform to ensure compliance with the regulations whilst maintaining consistency in application. However, our experience is that Advance Assurance demands a level of knowledge of the legislation that will expose any lack of understanding, potentially leading to an HMRC enquiry. We would urge companies to seek expert advice to ensure that their claims are 100% accurate – since over claiming, even unknowingly, could have severe repercussions for a business.”

Ashley Hayman, Cassons

“New valuations for business rates come into effect on 1 April 2017. Many businesses will suffer substantial increases in their rates. There is a transitional relief which phases the increases in over up to five years. The Chancellor himself has commented that this relief is complicated. It depends both on the rateable vale and the size of the increase over its previous level. And even the phased-in increases may cause hardship to some businesses.

“The position is more difficult for small businesses that no longer qualify for small business rates relief, those whose properties previously had a rateable value of less than £12,000 but whose properties are now valued at £15,000 or more. For those businesses, the Chancellor has announced that increases will be limited to £600 in 2017/18. That may be a more generous relief than the transitional relief that a business would otherwise have obtained.

“But this will benefit only a limited category of businesses. The full level of increased rates will bite at some point. The pain may be deferred, but the pain will surely happen.

“The Chancellor has said that he recognises the valuable role that local pubs play in our communities. (Don’t we all?) So he has announced that, from April 2017, pubs with a rateable value up to £100,000 will be able to claim a £1,000 business rates discount. We can drink to that! But the Chancellor has also made it clear that this discount will be for one year only.

“So there are three forms of rates relief: transitional relief where rateable values have gone up; a special relief for businesses losing entitlement to small business rates relief; and a one-off relief or pubs. What if those forms of relief are not enough? The Chancellor has also announced £300m funding for local authorities which he says will allow them to provide discretionary relief to provide help to businesses most affected by the revaluation. The detail has not been announced, so it remains to be seen how much each local authority will get and how this discretionary relief will work.”

Carol Cummins, Clarke Willmott LLP

“[The Reduction in dividend tax allowance from £5000 per year to £2000 per year from April 2018] will mean older people who rely on dividend income to supplement their pensions may face an extra tax demand, and could mean more of them having to submit tax returns.

“In addition, the introduction of the dividend tax allowance has increased the work involved in the administration of many trusts and estates.”

Richard Dawson, Rathbones Investment Management

“The Chancellor states that Britain is on track to borrow £26bn less than expected over the next five years; this is largely due to a significant improvement in tax receipts this year. But this isn’t really a budget for the fiscally prudent as projections still show a £16 billion deficit existing halfway through the next parliament; this deficit was meant to have been eliminated at the end of the previous parliament!

“The Office for Budgetary Responsibility upgraded its forecast for growth this year to 2% from 1.4% in November; however, growth in 2018, 2019 and 2020 have all been revised down, making a cumulative downgrade of 0.7%. One contributing factor for the lowering of this aggregate growth rate is the increasing tax burden the economy potentially faces. With this in mind, it is disappointing we didn’t see the Chancellor increase his meagre infrastructure package announced in the Autumn Statement, which equates to just 0.3% of GDP over the period of implementation.

“A couple of changes that will potentially directly impact many of your readers is the reduction in the tax-free annual dividend allowance from £5,000 per annum to £2,000; and the reasonably well flagged increase in National Insurance rates for the self-employed. Finally, it is pleasing to note that the Chancellor has refrained from further diluting the tax benefits offered by pensions.”