December 07, 2012 - Rachel Miller
Business groups and financial firms have been responding to the announcements made by Chancellor George Osborne on Wednesday in his Autumn Statement.
In what was widely seen as a mini-budget, the Statement was dominated by sobering news about the UK's slow recovery. However, some of Osborne's announcements took business commentators by surprise and many were welcomed – including the increase in the annual investment allowance and the scrapping of the fuel tax increase.
Phil Orford of the Forum of Private Business (FPB) described it as "a good budget for small businesses" and Graeme Leach, chief economist at the Institute of Directors dubbed it "a tricky job, well done".
On the increase in the annual investment allowance
Ruby Parmar, head of private business, PwC: "Perhaps the key positive for small businesses … this should support growth and encourage capital investment."
Paul Belsman, national head of tax, RSM Tenon: "Good news for SMEs and [it] should mean that most of their capital expenditure gets 100% relief. It is a clear sign that Government is supporting businesses investing in their businesses."
Phil Orford, chief executive, FPB: "There are big savings to be had here for firms who've been waiting for the right time to invest and upgrade equipment."
Matt Taylor, managing partner, Rockpool Investments: "The tenfold increase in the investment allowance equates to a £40,000 grant to any business that wants to grow by investing in new equipment."
On cancelling the planned increase in fuel duty
Phil Orford, FPB: "We had urged the Treasury to commit to the concept of a fuel duty stabiliser by the end of the current Parliament, so what we have here is temporary relief instead of a serious policy change with real lasting benefits."
John Walker, national chairman, Federation of Small Businesses (FSB): "We note small firms will face an increase in fuel duty in September 2013. Government needs to take the politics out of fuel prices once and for all and look at ways of raising revenue that gives road users greater certainty as to what their overheads will be from one Budget to the next."
On the reduction in Corporation Tax
Richard Baron, head of taxation, Institute of Directors (IoD): "The surprise reduction in Corporation Tax is a very welcome boost to the UK's competitiveness at a critical time. Reducing the tax burden for all businesses is the most straightforward way to help them expand and take on more staff."
On the economic forecast
Graeme Leach, chief economist, IoD: "Our key concern is that the OBR's growth forecasts will yet again prove too optimistic."
On the extension to the rate relief scheme
Richard Baron, head of taxation, IoD: "350,000 businesses will now not pay any business rates until 2014, a very helpful move when budgets are tight."
On tackling tax avoidance
Phil Orford, FPB: "Tackling tax avoidance is of course a sensible measure. HMRC have in the past focused too much on the SME end of the spectrum, so we see this as a healthy rebalance."
Could do better?
Nigel Stanford, partner at law firm Cripps Harries Hall: "Many SMEs would have been looking for something more radical to give them a boost – for example, a holiday from business rates."
Gary Wilkinson, CEO at Cambridge & Counties Bank: "While the Funding for Lending scheme, the new British Business Bank and today's announcement of a cut in corporation tax show that the Government is being proactive in the SME space, there needs to be better co-ordination of such initiatives."
John Walker, FSB: "We are disappointed that the Chancellor has not extended the current regional National Insurance Contributions holiday to all small firms across the UK. Our research shows that if it were extended to all UK-wide micro firms it would create 45,000 jobs and add £1.3 billion to UK GDP. We hope this is something the Chancellor looks at for Budget 2013."