News

News

Region’s businesses welcome ‘budget for business’ but warn smaller firms may not feel the benefit

The region’s business community has broadly welcomed Chancellor Jeremy Hunt’s Autumn Statement, with several key demands met by Government.

The Chancellor declared an “Autumn Statement for growth” with sweeping tax cuts for companies and workers – with a larger than expected cut to National Insurance.

Devon & Plymouth Chamber of Commerce CEO Stuart Elford welcomed the package of support for business – including investment tax incentives, reforms to speed up planning and measures to reduce delays in connecting to the National Grid, but asked for more detail on the 110 growth measures announced.

While Mark Tibbert, Partner and Head of Tax at leading accountancy firm Westcotts, welcomed a budget aimed at supporting growth but warned many smaller businesses were unlikely to feel the effects of some of the key announcements.

Key points for business included:

  • “Full expensing” tax break – allowing companies to deduct spending on new machinery and equipment from profits – made permanent
  • The 75% business rates discount for retail, hospitality and leisure firms in England extended for another year
  • Households living close to new pylons and transmission infrastructure to get up to £1,000 a year off energy bills for a decade
  • Funding of £4.5bn to attract investment to strategic manufacturing sectors, including green energy, aerospace, life sciences and zero-emission vehicles
  • Some £500m over the next two years to fund artificial intelligence innovation centres
  • Financial incentives for investment zones and tax reliefs for freeports extended from five years to 10 years.

At an event organised by the Devon & Plymouth Chamber, in partnership with Westcotts Chartered Accountants & Business Advisers, county business leaders gathering to react to the news as it developed.

The expert panel featured Shona Godefrey, Managing Partner at Westcotts; Mark Tibbert, Partner and Head of Tax at Wescotts; James Peterson, Partner at GA Solicitors who heads up the company/commercial team; Jonathan Keable, Managing Director of Business Success and Chairman of Plymouth FSB, and Jordan Kennedy, Senior Surveyor and Head of Business Rates Consultancy at Vickery Holman.

Regional view

Chamber CEO Stuart Elford, said: “The Chancellors Autumn Statement delivered all three of the main asks of British Chambers of Commerce, namely speeding up planning, reducing delays in connecting to the national grid, and making permanent the allowance on investment expensing.

“He backed this with some tangible figures and gave a very positive outlook for the economy, which will give comfort to businesses and encourage investment.

 “Looking at the South West, the extension of tax incentives for the Freeport were welcomed and should encourage inward and foreign direct investment.

“The Chancellor referenced 110 growth measures and is clearly aware that it is business that will grow the economy. While some details are still to be clarified, on the whole this was a positive budget for business.”

Tax and finance

Mark Tibbert, Partner and Head of Tax at Westcotts, welcomed the “full expensing” measure along with the package of tax cuts but warned that many small to medium sized businesses were unlikely to feel much tax benefit.

He said: “There were some significant announcements today that are welcome for employees, the self-employed and businesses alike.

“But whilst the tax cuts announced will benefit many, there are questions as to whether it is really a Statement that benefits businesses. With the tax cuts all aimed at employees or the self-employed, with increases in the minimum wage, increasing costs, and rates relief targeting only specific sectors, many businesses may find their costs increasing, especially employment costs.

“With the creation of a single R&D scheme it feels that the scheme is being focused on larger companies and there is less focus on development and innovation by smaller companies.”

Business rates

Jordan Kennedy, Senior Surveyor and Head of Business Rates Consultancy at Vickery Holman, welcomed the support on business rates for smaller businesses but warned business rates liabilities could rise for larger firms.

She said: “The Chancellor delivered very welcome news to smaller businesses, as well as those in the retail, leisure and hospitality sectors. It was announced the small business rates multiplier will remain at the current level until at least 31 March 2025. This means businesses with a rateable value below £50,999 will see their business rates frozen for another year from 01 April 2024. This, combined with the pledge to maintain the Retail, Leisure and Hospitality Relief at 75% for a further year from 1 April 2024 to 31 March 2025, will come as a great relief for many business owners.

However, those business owners whose premises have a rateable value of £51,000 or more, will see their business rates liabilities rise from April next year. This is because as it has been confirmed the standard business rates multiplier will increase in line with September’s CPI inflation figure of 6.7%. As we enter the second year of the 2023 rating list, in many cases – particularly in the industrial sector – this will coincide with a reduction in the level of transitional relief applied to business rates bills. For many, business rates liabilities will therefore be increasing quite considerably next year.”

Small businesses

Jonathan Keable, Managing Director of Business Success and Chairman of Plymouth FSB, said: “Good to hear that two of the seven asks from the FSB were announced in the budget. First extending the 75% discount on business rates for SMEs in the hospitality, leisure and retail sectors and second, insisting that the public sector pays within 30 days from date of invoice to small businesses.

“This will help 60% of SMEs who suffer from late payments from larger organisations juggling their cashflow.

“The FSB would hav eliked to have seen clarity on skills and training. They welcomed the £50 million investment in apprenticeships aimed at engineering but would like confirmed that:

  • 95% of apprenticeship training cost will continue to be supported by Government.
  • All schools to provide GCSE and A Level computer science or ICT courses.
  • SMEs able to get training on accessing tax deductions.”

James Peterson, Partner at GA Solicitors, said: “It was billed as an Autumn Statement to back businesses and there were several measures that will benefit some large businesses such as the extension of the super-deduction scheme.

“And some measures that will directly help some very small and self-employed businesses such as helping them get paid on time from large businesses and abolishing Class 2 National Insurance.

“However, it felt more like a budget to back British workers from the majority of the announcements.

“These measures will hopefully indirectly help small and medium sized businesses but at some cost – when you look at things such as the increase in the National Living Wage.”

Be part of something bigger

Not a member yet?

Chamber members are three times more likely to survive – and thrive – than other businesses. If you’re ready to join now – click the link below to get started. 

Not ready to join now?

Sign up to our free weekly Chamber Bytes email and get the latest news, offers, events and business support from us and our members every Thursday.