UK Professional Bodies Respond To The 2016 Budget
Chancellor George Osborne has finally delivered his budget proposals, announced on Wednesday, and now the comments are rolling in.
His 62 minute speech included details on lowering tax to drive growth for businesses, creation of a new type of savings for those under 40 years of age, forecast for the country in the next two years and support for working people.
Following his third budget announcement in 12 months, several UK professional bodies have responded on whether it is satisfactory.
“The combined measures announced on business rates will be viewed by our members as a welcome and important step on the road to fundamental reform.
“In addition, online retailers will benefit from steps to secure a level playing field for smaller online businesses on VAT.”
“We always look at budget statements in lots of detail, to understand how each and every decision affects the small business sector. We are pleased to see that George Osborne has presented plans that positively influence the small business sector.
“But there is still more to be done and we continue our work to champion this vibrant sector to make sure government are doing all they can to support it. As is often the case, much of the devil is always in the detail and we’ll be looking at that over the next few weeks and months as more details emerge; to ensure the benefits we see here are rolled out as is suggested in today’s statement.
“Whilst we are pleased to see proposals outlined that will positively impact on small businesses, we also need to be mindful to ensure people feel confident enough to set up these businesses in the first place, which is where the value of the enterprise support sector comes in.”
“HM Treasury has announced that there is to be a new duty on the public sector to ensure workers who are engaged through a PSC pay the right tax.
“While we support this in principle, HM Treasury has also said in the small print that when recruitment firms are involved, they will be deemed responsible for assessing employment status for tax purposes and consequently liable for the payment of taxes.
“This is clearly unjust, because determining someone’s tax liability is highly complex. The IR35 tax rule, which governs the tax paid by PSCs, is not a simple test and requires detailed understanding of many aspects of a worker’s relationship with the client, and of a PSC’s day to day operations.
“But recruitment firms simply do not have sight of the reality of the working relationship. It is, therefore, entirely unreasonable to expect them to make this decision, and be financially liable for it.”
“After a year of surprises, this was a stable Budget for business facing global stormy waters. The Chancellor has listened to our concerns about the mounting burden on firms and chosen to back business to grow the economy out of the deficit.
“Businesses will welcome the Chancellor’s permanent reforms to business rates – Taking more small firms out of the regime and changing the uprating mechanism from RPI to CPI, which the CBI has long been calling for.
“The Budget included a number of useful measures to encourage entrepreneurship and growth, particularly cuts to capital gains tax and the extension of Entrepreneurs’ Relief. New allowances for micro-entrepreneurs will encourage participation in the sharing economy and encourage the growth of new and innovative platforms.”
“There was plenty in the Budget for small businesses to welcome in the form of cuts to capital gains tax, relief on business rates and a further reduction in the rate of corporation tax.
“However, changes to taxation and balance sheets alone aren’t enough to make businesses thrive. Both government and employers really need to get under the skin of how people are performing at work, the barriers that prevent them from being productive and how we can improve the skills and potential of the British workforce.
We know that incompetence or bad management causes about half of corporate failures and these Budget measures could even reduce productivity by extending the lives of badly run businesses.”
“The disproportionate burden of tax and regulatory adherence for small businesses is a limiting factor on their growth, and the Chancellor has partly demonstrated that he recognises this. We will continue to lobby for more simplification and more encouragement for investment in small private and family owned enterprises.
“The Chancellor has listened to our calls to create a level playing field by taxing multinationals and looked to reinvest the money in small businesses. The changes to business rates were more positive than we could have expected given the circumstances.”