Swindon business experts have given a mostly positive reaction to this week’s Autumn Statement and Spending Review.
Ian Larrard, director of the Swindon and Wiltshire Initiative – part of Business West – said it contained some good news for the region. 
“Once again the ‘builder’ Chancellor has used the tools at his disposal to create a statement that the majority of businesses will applaud,” said Mr Larrard, pictured right.
“The statement, widely predicted as being gloomy, was surprisingly upbeat in business terms as he started by citing the South West as a well-performing region with the lowest unemployment rate in the country.
“The first win for business was the increased funding for much needed infrastructure improvements, for example the £2bn investment to upgrade the A303. Businesses can only operate as well as the environment they are in, and the announcement that Britain will be spending a higher proportion of its income on infrastructure than at the start of the Parliament will be met with applause. This included big increases in the transport capital investment budget, with a 50% rise.
“We then heard the Chancellor turn to a ‘huge reform to raise the skills of the nation’. High youth unemployment and business skills gaps are a cause for national embarrassment, and in Swindon we are working with both business and education to bridge this gap.
“A package of reform for education along with details of the Apprenticeship Levy will be welcomed by businesses from the smallest to the largest. Although there are reservations as to how this will work in practice.
“It was also good to see political emphasis on fixing the housing crisis. The doubling of the housing budget was welcome news, but the overwhelming emphasis on home ownership may be a mixed blessing.
“On the one hand, higher-skilled workers are likely to want to own their own home, so making this easier should make them more likely to stay in our region. However the lack of lower-cost rented options may start to hit the lower part of our labour market. It is also worrying to see that the Office of Budget Responsibility is still predicting that house price rises will continue to outstrip earnings.”
Dominic Bourquin, pictured right, corporate tax partner at Swindon accountancy firm Monahans, said many working families would be heaving sighs of relief as they absorb the implications of the spending review. 
“Those in receipt of tax credits, who may have feared those credits would diminish or even disappear, have instead seen the Government perform an unexpected U-turn, leaving many families with several hundred pounds net more a month,” he said.
“In the wake of rumours of substantial cuts to tax credits, it’s a bonus that many will not have dared anticipate. However it is likely these changes will bite later when Universal Credit comes online in the next couple of years.”
He said this U-turn would partly be paid for by big businesses, through the new apprenticeship levy on corporates whose wage bill exceeds £3m per annum, with the balance coming from increased Stamp Duty on buy-to-let properties and second homes.
“Parents of three- to four-year-old children will reap new benefits, if they work more than 16 hours a week and earn less than £100,000 a year,” said Mr Bourquin.
“From 2017 they’re set to receive 30 hours of free child care a week – a welcome boost to those families where a parent wants to return to work, but who have been caught up in a Catch 22 situation of being unable to afford to do so.”
He said the chancellor had also reached out a helping hand to those trying to get on the housing ladder.
“In response to the mounting difficulties faced by those in their 20s and 30s who want to buy their first homes, he has committed to doubling the national housing budget. At £2bn, that’s hardly a princely sum in the greater scheme of things, but it should create 400,000 affordable homes, allowing 160,000 new starter homes to be built on publicly-owned land, and offering 135,000 buyers shared ownership on homes that will be on sale at 20% discount on market rates.
“The Government is also introducing the right for housing association tenants to buy their homes – no doubt a welcome message for many existing tenants, although it does beg the question as to where housing associations will source their rental stock in future.
“We’re told that the planning system will be overhauled, to make it more easy for developers to build, too. Good news if you believe it – but forgive me if I remain sceptical. We’ve been here several times before.”
For anyone involved in one of the larger corporate tax avoidance schemes, it was time to start being very afraid, said Mr Bourquin.
“HMRC is going to be investing £800m in clamping down of tax avoidance – and seems to be confident it can reap ten times that amount in revenue. Tax avoidance erodes the country’s tax base, as well as eroding confidence in HMRC itself. It sounds as if the taxman is finally saying enough is enough.
“Meanwhile, businesses large and small that were expecting to wave goodbye to small business rate relief have had a reprieve – the Chancellor has extended the scheme for one more year.” 
Malcolm Emery, a partner at law firm Thrings – which has its largest office in Swindon – said the Chancellor, in what was effectively his fourth Budget speech in less than 12 months, had taken the opportunity to announce a series of vote-winning giveaways to businesses and individuals.
Mr Emery, pictured right, who is a dual-qualified chartered tax adviser and solicitor, added that Mr Osborne still appeared to be in austerity mode – “and with a large black hole to fill it is arguably with good reason”.
He added: “The rise in the basic State pension, protection of police budgets and the increase in financial support for education will have been welcomed by many people in the UK. However it is the Government’s decision to scrap proposed changes to tax credits that will inevitably attract the headlines, with some of the required £4.4bn being met by an increase in Stamp Duty land tax payable on buy-to-let properties.
“Many businesses will welcome the abolition of uniform business rates, the setting aside of £12bn for a Local Growth Fund and the creation of 26 new or extended enterprise zones. Meanwhile the introduction of an apprenticeship levy – set at 0.5% of the employer’s wage bill – will aim to deliver three million apprenticeship starts by 2020, with each employer receiving a £15,000 allowance to offset against their levy payment.
“Little was offered by the Chancellor on further tax cuts, although this is perhaps not surprising as many are still working through the reforms he proposed in his summer Budget to non-domiciled individuals living in the UK and the taxation of dividend income. Both reforms will impact on the economy, particularly for those families who use companies for business and wealth preservation purposes.
“Mr Osborne also talked about the digital age and its ability to facilitate costs savings within HMRC by creating individual accounts for each and every taxpayer. Earmarking an additional £800m to tackle tax evasion highlights the Government’s commitment in this area, with the new measures forming part of his plans to ensure the UK has the ‘most digitally advanced’ tax system.”
Tax partner at accountants RSM in Swindon, Lucie Hammond, pictured below, said someone had to suffer as a result of the planned cuts to tax credits being scrapped – in this instance it was buy-to-let landlords. 
“In the Budget last July, the Chancellor announced tax increases from 2017 for landlords, and now they’ve been hit again – this time with a 3% stamp duty surcharge on buy-to-let properties and second homes,” she said.
“There’s a real risk here that rents could increase as landlords pass down the additional cost to their tenants, or that the rental property sector in Swindon could shrink as landlords sell up. Either way, this could have a seriously detrimental effect on the regions buy-to-let industry.”
While it was fantastic to hear the news that the South West had the highest employment rate in the UK, it was essential that businesses took advantage of tax incentives that were available, for example in innovation, which would help to bolster investment to retain skilled staff and to continue to create jobs in the region, she said.
“With the introduction of the Apprenticeship Levy, those who may struggle will be larger companies, in particular agencies in Swindon that supply temporary staff – who will see it as a ‘levy on employment’,” she added.
“Clearly this move, which the Government predicts will generate £3bn annually by 2021, has been designed to sidestep the ‘lock’ on National Insurance.
“Not surprisingly, we heard there would be a fresh crackdown on tax avoidance which will raise an additional £5bn. At first glance this looks impressive, but in reality, this was always on the cards as a result of the redeploying of resources in HMRC. So you could say that this was just a very good example of ‘window dressing’.” 
For Neil Elsden, director at Banks BHG chartered accountants in Swindon, the Autumn Statement delivered more on politics than content and the Chancellor actually said very little.
There was some good news for businesses, including the extension of small business rate relief scheme for another year. The uniform business rate is also to be abolished and councils will be able to set and keep their own business rates instead.
Mr Elsden, pictured right, said: “We note that anti-abuse legislation is being strengthened, and that the taxation system will be fully digitised by the end of the decade. However, this does mean the Government will be able to accelerate collection of Capital Gains Tax after a property sale, as they have previously indicated.
"Couple that with the Chancellor’s announcement of a 3% increase in stamp duty for second homes and buy-to-lets, and investment in property potentially becomes a lot less attractive.”
