- Chancellor Philip Hammond has made his Budget statement – the final announcement before Brexit comes into effect – elements of which may come as a relief to high streets, entrepreneurs and rural businesses
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The Chancellor plans to revitalise British high streets by cutting business rates for firms with a rateable vale below £50,000, affecting 5.7 million small businesses across the UK. Andy Melia, head of place and impact at Business in the Community, part of the Prince of Wales’ responsible business network said, “Today’s announcement by the Chancellor will come as a relief to the UK’s high streets, as well as the communities based around them. Modernising planning can support a shift in revitalising town centres across the UK, benefiting individuals, business and society as a whole and helping local communities to grow and thrive. The cut in business rates for firms with a rateable value below £50,000 will also be welcome news to Britain’s 5.7 million small businesses, who are the backbone of communities around the country.
“Healthy businesses are vital to healthy communities, and both business and community groups have a wealth of expertise which can be combined to help regenerate places across the UK. By working together to understand what their area needs and using their collective knowledge to develop long-term, sustainable partnerships, employers, public sector organisations and voluntary and community organisations can create communities which are able to thrive.”
Minette Batters, president of NFU said, “As we move ever closer to leaving the EU, farmers and growers are still seeking assurances and clarity about the environment they will be operating in. In these times of uncertainty, policies that support sustainable farm businesses are crucial.
“The announcement that the Government will introduce a new Structures and Buildings Allowance for non-residential structures has gone some way to meet our call for tax relief on investment in farm infrastructure and will help farmers invest in modern, efficient buildings.
“The NFU also welcomes the increase to the Annual Investment Allowance to £1m but we are disappointed it is time-limited for two years.
“We are pleased to see that there is a significant £200m investment in piloting new solutions to deploy full fibre internet in rural locations. It is vital that this is not a one-off investment and it must be part of a continued effort to deliver better connectivity for all rural businesses.
“According to the latest NFU survey, 59% of farmers felt the broadband speed they received was insufficient for their business. We hope that this investment in the National Productivity Investment Fund will be used to address the digital divide between the countryside and urban areas.
“The announcement today that the National Living Wage will increase by 4.9% is substantially more than the sector expected and comes at a time when farm businesses are faced with a rising cost base. We will continue to engage with the Low Pay Commission on this issue.
“It is vital the strategic importance of the farming industry that provides the raw ingredients for the UK’s largest manufacturing sector, food and drink, which generates £113 billion for the economy, is properly recognised and valued by the Government.”
Mike Cooper, Partner at Moore Stephens, an accounting and advisory network said of The Chancellor’s extension of the qualifying period for Entrepreneurs’ Relief from one year to two (effective from 6th April 2019), “This change has led to a ‘cliff edge’ for those individuals who were considering a business sale under the old regime. It could now create a rush to sell some businesses ahead of the 6 April 2019 deadline.”
“The change could also make it harder for businesses to incentivise staff tax efficiently. It also makes fast-growth businesses a less attractive prospect for individuals because they may not be able to get the tax breaks unless the business is sold at least two years after they receive their shares.”
“Extending the qualifying period means the Chancellor is effectively forcing businesses to plan further ahead, but the continued Brexit uncertainty makes that more risky.”
“While the Government says this change will not affect 95% of claimants, it still believes it will raise an extra £260 million for the Government over the next six years, so every company will now have to consider how it affects their timescales and business plan going forward.”
“In recent years, the Chancellor has been under political pressure from some quarters that say Entrepreneurs’ Relief is too generous. However, it remains a very important relief that can incentivise entrepreneurship providing the qualifying conditions are met.”
Ian Wright CBE, chief executive of FDF said, “Food and drink manufacturers – 97% of whom are SMEs - will welcome the Chancellor’s announcements today on productivity, exports, infrastructure, enterprise, business rates, investment and entrepreneurs.
“FDF is particularly pleased to see our representations on the way the Apprenticeship Levy operates have been listened to and acted upon.
“While we are committed to reducing packaging waste and working with Government, today’s new tax on plastic packaging will result in significantly increased costs for UK food and drink manufacturers, due to the input costs required to produce food-grade recycled packaging.
“However the shadow of Brexit, and in particular a ‘no-deal’ Brexit, hangs over the food and drink industry and gets darker every day. While that remains the case, it is hard to see how we can long continue with business - or politics - as usual.”
IMAGE: JEFF OVERS