Budget 2018: Swindon business reaction

October 29, 2018

While some of Chancellor Philip Hammonds Budget measures were welcomed by Swindon business leaders, others did not get the thumbs up.

Swindon & Wiltshire Initiative director Ian Larrard, pictured, had mixed views. He said businesses would welcome the Chancellor’s decision to lift the cap on local authority borrowing to help boost housing numbers in the region.


“The spiralling cost of housing makes it tougher for businesses to attract the skilled workers they need to live and work here, so making an extra £1bn available is a step in the right direction,” he said.


Mr Larrard also said independent high street retailers would breathe a sigh of relief that their business rates pressures have been eased.


“Nevertheless, the future of the high street remains uncertain and I hope that the £650m is the first of many pots of funding made available by the Chancellor moves to help boost our town and city centres.”


He said as far as the so-called tech tax is concerned, nobody would disagree that businesses should pay their fair share.


“However, it would be counterintuitive to penalise tech companies and put at risk investment in the UK economy, particularly in light of the emphasis on embracing new technologies in the industrial strategy white paper,” he said.


The Chancellor’s decision to close the self-employment tax loophole could also lead to problems. “It is unfair to suggest that professional service companies are simply a tax avoidance mechanism, when the reality is that most contractors have no choice but to use a limited company,” said Mr Larrard.


“The time is probably right, however, to review these tax rules given that the last change in legislation came back in 1999. A major concern for businesses will be that these changes make it more difficult to recruit contract workers in what is an already tight labour market, therefore highlighting the need for further investment in training and skills.”


The Swindon & Wiltshire Initiative is part of Business West, the region’s largest business organisation.

Dominic Bourquin, pictured, partner with regional accountancy firm MHA Monahans – which has offices in Swindon and across the West of England – said overall, this year’s Budget seemed more positive than those in previous years.


“It has ticked a lot of boxes for many – small businesses, health, schools and individuals – but the devil’s in the detail and it’s still early days to see exactly how many of these promises will be developed as a number are based on future consultations – and when they will materialise,” he said.

“The Chancellor does seem to have opened the taps with a number of measures to support small businesses, particularly with business rates reduced by a third for two years for those with a rateable value under £51,000, which should also help reinvigorate our high streets as 90% of shops should also fall into this bracket.

“Employment and skills have also received a boost with the halving of employer apprenticeship levy from 10% to 5%.”

However, he said disappointing changes had been made to research and development (R&D) tax credits, as businesses would now have to have paid PAYE before being able to claim. 

“This may be rather short sighted as, in our experience, many businesses claiming this relief are often very small and solely staffed by the directors who take their salary through dividends rather than PAYE,” he said.

“This change, and the resulting reduction in R&D claims, may make many of these businesses unviable to run.

“Similarly, Entrepreneurs’ Relief has had the holding period for shares doubled to two years – delaying this release of funds may be problematic for serial entrepreneurs needing to release their funds more quickly for their next project.

“What will be widely applauded is the introduction of the UK digital services tax from April 2020, applicable to digital platform businesses with global turnover in excess of £500m – and we all know who they are! 

“It was certainly a shrewd move to apply it to turnover and not profit. With a growing digital market, the traditional tax base is shrinking and so this move is one to help the government keep up and try to ensure fairness by bringing in as much revenue as they can from these businesses.”

He said it was good to see the government sticking to its promises with the tax on single use plastics being consulted on while the £10m funding pledge for Air Ambulances, which currently receive no government funding, was also refreshing.

“Similarly, with the announcements on extra funding for mental health, veterans, schools and social care many more aspects of our community will ultimately benefit.

“There’s a saying that taxation is all about getting the largest amount of feathers from the goose with the smallest amount of hissing, and that seems to be what Philip Hammond is doing with this year’s Budget.” 

Richard Mathews, pictured, chief executive of Swindon professional services company Optimum, said the Budget had “some bits of good news and some not so good news.”


“Good to hear that the increases in personal allowance and higher rate tax are being introduced a year early,” he said.


“We’re also pleased that stamp duty relief for first-time buyers is being extended, and backdated, to those in shared ownership. Help with business rates, freezing the VAT threshold, raising the annual investment allowance and freezing duties are all good news.


“But the Chancellor said nothing about pensions or about National Insurance, and I find that silence a bit worrying. As ever, the devil will be in the detail.


“However, one thing we are delighted about is that, as a business partner of Swindon mental health charity TWIGS, the Chancellor is devoting more resources in this area.” 


West businesses had prioritised a freeze or cut to business rates and an increase in investment in transport infrastructure in a pre-Budget survey by Lloyds Bank Commercial Banking.


“So they will broadly welcome the measures to address those issues that the Chancellor announced,” said Adam Rainey, the bank’s regional director.


“The pledge to slash business rates for independent retailers could prove to be a lifeline for many stores in the region’s high streets, helping create a better environment for business growth and freeing up cash to invest in new opportunities,” he added.


The pre-Budget survey had also showed that West firms wanted continued investment in infrastructure. The extra funding allocated for this was a step in the right direction to help improve connectivity across the region, particularly for rural communities, said Mr Rainey.


George Arkell, managing director of family-owned Arkell’s Brewery, cheered the Chancellor’s freeze on beer duty.

“The government’s support in the growth and innovation of our sector has enabled us to make strong investments in our brewery in recent years, which is reflected in the quality and selection of beer we make,” he said.

“This is a positive thumbs up in the government’s confidence in pubs and breweries and the crucial social and economic contribution they make to the UK.” 







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