With the first wholly Conservative budget since 1996 finally announced, what did UK SMEs make of it all? We speak to you to find out your opinions.
“The summer budget announcement was fantastic for alternative finance in the UK. We’re really encouraged by the Government’s introduction of the Innovative Finance ISA, for loans arranged via P2P platforms, and it would be fantastic for the industry to see that extended to equity crowdfunding and debt securities.”
“Likewise, it’s brilliant to see that the government will introduce final legislation implementing 2 major reforms to the SME lending market. Ultimately, the UK’s major banks will now cooperate and share credit information on their SME customers with other finance providers through designated Credit Reference Agencies (CRAs). Plus, banks will now need to offer SMEs they reject for finance the opportunity to be referred to a finance platform that can help match them with alternative lenders. To see the government support the alternative finance industry with this budget is really exciting.”
– Sharon Argov, Co-founder of Fundbird.
“The announcement of reduced corporation tax in today’s budget is good news for the recruitment sector, offering more scope for job growth and expansion. That, combined with the introduction of increased Sunday trading hours is great news for businesses and employees alike and we expect to see a continued rise in jobs over the coming months.”
“However, the introduction of a National Living Wage is likely to oppose these positive changes. Despite it being a good introduction for those in low-paid jobs, it is likely to cause a contraction in job growth due to the increased funds that businesses will need to invest in higher wages.”
– Lee Biggins, managing director of CV-Library.
“This was a business focused budget and the cut in corporation tax will be extremely welcome by many business leaders across the country. As will be the increase in the business investment allowance.”
“We also welcome the Government’s commitment to the funding of higher education. We have more than 40 international study centres around the world and our strength revolves around the high global value of British qualifications. The Government’s investment plan will ensure this continues.
“Similarly the pledge to continue the funding of the Asian Infrastructure Investment Bank is extremely encouraging, especially for the London School of Marketing and other organisations that are expanding their businesses in Asia.”
“The reduction of the non-dom benefits however, and the significant focus on chasing tax avoidance might affect the desire of foreigners to set up companies run from London, the proof will be in the way these are implemented.”
“Looking at the marketing industry as a whole the creation of the northern ‘powerhouse’ has the potential to break the capital’s vice like grip on the sector. We are already starting to see the early signs of a creative exodus taking place in the capital, and if the northern regions are made more attractive with better transport links we could very well see more marketing companies emigrate.”
“However, while the Government’s earn or learn approach may be laudable it is unclear if all young people are in a position to, by themselves, make the most in this modern world.”
– Jacques de Cock, Faculty Member, London School of Marketing.
“Overall we thought this was a hit-and-miss Budget for freelancers and micro-business owners. The continuing reductions in corporate and personal taxes can only be seen as a good thing, but the changes in Dividend taxation and the new restrictions to the Employment Allowance will negatively impact one-person limited companies. George Osborne is essentially giving with one hand and taking away with the other.”
“The Budget document also contains a mention of another IR35 review – however the wording suggests the Treasury is more concerned with strengthening enforcement than reducing the burden of compliance on the millions of freelancers and contractors unnecessarily affected by IR35. We think this is a rather backwards approach, and the priority should be making compliance easier, given self-employment is such a fast-growing and vital part of the economy.”
– Darren Fell, CEO of Crunch Accounting.
“The Chancellor began his opening statement on the summer budget talking about business confidence stating that he wanted to encourage businesses to invest, grow and hire. With this in mind the FPB is distinctly underwhelmed by the budget as it raises too many concerns for our members to be able to invest, hire new employees and drive economic growth. There was little in
the Chancellor’s statement to directly address the impact of compliance and red tape on SME’s.”
“The increase in national minimum wage (and the accompanying differentials within firms) will be difficult for a large number of SMEs to pass on to clients. The biggest issue may however turn out to be the changes in terms of how dividends are taxed as many small business owners pay themselves very little, using a dividend as their reward when the company performance justifies it.”
– Ian Cass CEO of the Forum of Private Business.
“This was a Budget for business, and is likely to prove popular with large numbers of SMEs. The Chancellor has set some big targets for the UK over the next five years and he needs small businesses to be firing on all cylinders to do that. The reduction in Corporation Tax will help some small businesses cope with the increasing costs of pensions. With minimum contributions for employers set to increase to 2% in 2017 and 3% in 2018 this is a smart move by George
“The NI savings made will also support SMEs when it comes to investing for growth.”
– Matthew Mitten, director of Enrolsme.com.
“The Chancellor has pledged an investment of £750m to target tax evasion. This is a significant amount of money to solely tackle tax evasion. At a time where all areas of HMRC are lacking sufficient funding we would prefer to see resources being made available to improve other frontline HMRC services. For instance, some of our clients are currently experiencing much longer Research and Development (R&D) tax claim processing due to HMRC restructuring and R&D unit closures.”
“These changes continue the Government’s tough line on tax planning – now evasion, avoidance and planning are all lumped together as undesirable. This will maintain the situation where genuine tax incentives, such as R&D tax credits, become more and more important to companies wanting to plan their tax affairs efficiently.”
– Martin Hook, Managing Director, of Ayming UK