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BHHMA:
‘This year’s budget seemed to be largely neutral’ was the comment from Andy Vaughan, DIY and brushware director at the BHHMA.
“With most of the changes for the next tax year 07/08 already published, we have time to get to grips with the implications of Mr Brown’s announcements on the 08/09 tax year,” commented Andy. “However, whilst his reduction of 2% in corporation tax was very welcome, many of our members fall into the smaller company category where tax rates will be rising over the next couple of years.
“The general feeling seems to be that the effects of the budget are broadly neutral in fiscal terms and that none of our members will be changing their business forecasts significantly as a result of the budget.”
The British Retail Consortium:
The British Retail Consortium (BRC) gave the Chancellor 8 out 10 for his Budget saying he could have gone further on reducing the business tax burden but had made some positive announcements on jobs and the environment.
British Retail Consortium Director General Kevin Hawkins said: “As always the devil may turn out to be in the unannounced detail but the Chancellor has rightly made a worthwhile reduction in Corporation Tax and the anticipated ‘green’ measures seem very sensible.”
On Corporation Tax, Kevin Hawkins said: “The cut in Corporation Tax is good news. It is being somewhat offset by cuts in a number of tax reliefs but is a welcome simplification and a decisive move in favour of jobs and investment.”
On the environment “We called on the Chancellor to cut VAT on energy efficient products to five per cent. He could have done that in the UK immediately but his pledge to push for Europe-wide agreement is welcome. If the EU is serious about reducing carbon emissions it will back this initiative. It is a pity that incentives for small scale renewable energy equipment such as wind turbines and solar panels are confined to homes but the Chancellor has conceded the principle. We hope this will be extended to business premises next year.”
On Local Employment Partnerships “This is an imaginative and practical scheme. It is not some abstract plan dreamt up by bureaucrats but builds on the help a number of major BRC members are already offering to enable people lacking the skills or self-confidence to get into the workforce more quickly. The BRC will be working to widen retail support for it.”
The Federation of Small Businesses:
The Federation of Small Businesses (FSB), the UK’s largest business organisation with 205,000 members, reacted to what is expected to be Gordon Brown’s last budget speech by criticising the Chancellor’s move to ramp up corporation tax on small businesses while cutting it for larger firms.
Carol Undy, FSB National Chairman, said: “This is the Chancellor’s eleventh Budget and this year’s offering is no different to the others - he gives with one hand and takes with the other. However, this year, after some welcome initiatives for our members he throws it all away with a tax hike aimed at small businesses. Corporation tax was cut for large firms but increased for smaller ones. Small businesses employ fifty eight per cent of the private sector workforce - over twelve million people - and the increase in their tax rate fails to acknowledge their contribution. A cut in income tax is welcome but does not fully offset the dismay felt by small firms despite the other allowances that he has offered.
“Investing in education is of course vital to the success of British businesses and we welcome the initiative to get Universities and business working together on innovation. However, we have had ten years of investment in the school system and our members are still reporting a drastic shortage of basic literacy and numeracy skills. Allowances for small businesses to train their employees in basic skills are also welcome to tackle the problem in the workplace too.
“Increasing road tax on larger engine vehicles and company cars will also hit small businesses that use such a car or van for their business needs. Other green measures may also be counter-productive. Higher taxes will rein in the economy at precisely the time when businesses are seeking to invest in new ways of reducing their environmental impact.
“We congratulate the Chancellor on accepting our proposals to reduce the business rate relief on empty commercial property. This will ensure the better use of commercial premises. The use of more risk-based regulations for Employment Tribunals is also a boost for small employers.
“On the Lyons Review we are pleased that there will be no return to setting business rates at local level. But allowing a variation on top of the business rate and other variable service charges, including a possible bed tax, will lead to even more complexity for businesses to deal with on top of already existing initiatives. Councils will undoubtedly use these powers to bring in more money from businesses rather than hit voters with higher council tax. However, a number of our members are home-based and will welcome the initiative to tackle the problems of the Council Tax.”
By Roland Ravenhill
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