THERE was a lot of anticipation for the first Conservative budget in 19 years and, whilst there were clear winners and losers, for business here in Northampton the announcements were overall very positive.
The biggest change for businesses announced by the Chancellor was the reduction in Corporation Tax, down from 20 per cent to 19 per cent in 2017 and a further drop to 18 per cent by 2020. This will help local firms as long as profitability remains strong.
As the Chancellor unveiled this change he declared that ‘Britain is open for business’.
THERE was a lot of anticipation for the first Conservative budget in 19 years and, whilst there were clear winners and losers, for business here in Northampton the announcements were overall very positive.
The biggest change for businesses announced by the Chancellor was the reduction in Corporation Tax, down from 20 per cent to 19 per cent in 2017 and a further drop to 18 per cent by 2020. This will help local firms as long as profitability remains strong.
As the Chancellor unveiled this change he declared that ‘Britain is open for business’. This trend has been reflected in our recent Northamptonshire Limited report which showed that businesses in Northampton are feeling confident and optimistic about the future, demonstrated by investment and growth. The fall in the Corporation Tax rate and confirmation of the Annual Investment
Allowance beyond 2015 will help local businesses continue to expand and create jobs.
George Osborne also announced that £5billion will be saved from clamping down on tax evasion and avoidance which will help create a more level and fair playing field. Small and medium sized business (SMEs) will certainly welcome this focus on making companies pay their fair share as long as the new measures do not add more red tape for the majority of businesses who are playing by the rules.
Finally, the introduction of an Apprenticeship Levy will help to plug the skills gap by encouraging more businesses to take on and train young people to create a talented workforce for the future. This is to be funded by large employers, but it is hoped that local businesses will be net beneficiaries as, in a recent Grant Thornton survey, more than half of Northamptonshire companies questioned said availability of skilled staff was the great constraint to business.
However, there were several missed opportunities in the Budget. We would liked to have seen the government provide more support for businesses to team up with local education establishments and create opportunities to inspire local talent in Northampton. More help could also have been given for businesses to expand their exports and develop overseas; particularly as in Northampton we have a number of businesses looking to expand outside of the UK.
Whilst the announcements in the Budget will certainly help Northamptonshire businesses continue the growth trend we are seeing, there is a note of caution. The uncertainty surrounding the economic situation in Greece and the upcoming EU referendum could create instability in both the Northamptonshire – and wider UK – economy which could affect business confidence going forward.