What are businesses hoping for tomorrow’s Budget?

Talk Business speaks to seven business leaders about tomorrow’s Budget and how it may affect SMEs.

shutterstock_244903099Rich Wagner, CEO and founder of Advanced Payment Solutions (APS)

“I was extremely pleased to see the publication of the Self-Employment Review last month. However, the “lack of knowledge regarding finance” that was highlighted is worrying, and something that Osborne must address in the upcoming Budget.

“The difficulty small companies and sole traders face in accessing finance through traditional players is well publicised, but there is a still a fundamental issue lurking beneath this: the number of entrepreneurs and small businesses that struggle simply to open a basic bank account, due to poor credit history, or – unavoidably for a new business – limited trading history. We found that currently, only 35% of micro businesses and sole traders we surveyed have secured a business bank account with a high street bank. Even more shocking, we also uncovered that when denied an account, only 26% of SMEs said that their banks always suggest alternative solutions and providers when unable to offer support – suggesting a number of sole traders may be forced to operate through personal accounts and risk financial mismanagement.

“The current banking system isn’t set up to deal with the needs of the UK’s smallest companies. For some time we have heard the British Business Bank discussing the idea of forcing banks to recommend alternative players to those they turn away. However, it appears progress has stalled until late 2016 and likewise, the publication of the Competition and Markets Authority (CMA) banking probe has been heavily delayed. It’s crucial that the government takes this initiative seriously and pushes for progress amongst all parties, as it will go a long way to boosting financial equality for self-employed and small business owners of the UK.”

Philippe Gelis, CEO and co-founder, Kantox

“I was particularly interested in the proposals for a FinTech regulatory sandbox made earlier in the year. I hope that within Osborne’s Budget we will receive an update on its progress ahead of the next impending announcement due in Spring. With FinTech generating around £20bn in UK revenue annually, the government needs to stand up and put in place measures that can support the growing FinTech ecosystem.

“The introduction of the sandbox will allow successful FinTechs to truly be recognised as beneficial organisations, and have the parameters to safely evolve within a regulated environment. Whilst the sandbox has focused around the benefits that this could bring to the consumer, I would hope that Osborne details how B2B companies will be able to become involved with this new scheme – FinTech is, after all, solving problems for businesses across the UK too.”

Ed Vernon OBE, chairman of Macildowie

“The Chancellor has gone from being upbeat in the autumn statement to a state of concern about a ‘cocktail of economic threats from the world economy’.

“George Osborne is still wedded to the idea of a budget surplus by the end of parliament so I expect Wednesday’s announcement to be absent of giveaways but broadly neutral for recruiters, candidates and businesses alike. The threat of a Brexit looms in the background but the outcome cannot be assumed so this won’t impact his announcements.

“Businesses and SMEs in particular are growing increasingly concerned about high taxes on employment as well as crying out for an overall simplification of our complex tax system. I’d like to see a change in the tax structure for small businesses, particularly when recruiting new members of staff. A simpler system would ease red tape on SMEs and encourage a focus on what really matters – growth and investment.

 “Like many, I’d like to see a crack down on tax loopholes for larger businesses who often merely displace jobs, yet provide little or no support to the country’s health, education and infrastructural systems upon which they depend. This creates an unfair basis for competition with those businesses that do play fair.”

Dr. Mark K Smith, CEO of ContactEngine

“The Government’s stifling VAT cliff is outrageous, unfair and needs to change in the next Budget. Once you reach £1.6 million in revenues, you go from paying VAT on receipt of payment to the moment you invoice – meaning you pay your taxes before the money is in the bank.

I’d like to see the Government move away from the cliff model and place all businesses on cash VAT accounting. This would have the dual effect of easing the cash-flow pressure facing all successful businesses around the country whilst particularly helping small businesses who are often already disadvantaged by lengthy client payment terms.”

Bivek Sharma, head of KPMG Small Business Accounting:

“Small businesses would like to see George Osborne announce measures to reduce the cost of property for small and micro-businesses by providing tax breaks for shared workspace providers, and support affordable skills for the modern workplace through better apprenticeships and training, especially for emerging sectors.

“They would also like to see better access to funding for start-ups (less than 3 years old), whose cash flows may be affected by the administrative burden of auto-enrolment, the new digital tax system and changes to dividend allowances in 2016.

Small businesses will also be watching for any announcements around ensuring faster broadband speeds for rural businesses in all UK regions as a priority, and a reduction in business rates for small and micro-businesses to enable these firms to be more competitive and set more ambitious Government SME procurement targets; 25% is very small when the vast majority of British businesses fall into this category.”

Damian Hennessey, director, Proto Labs said:

“Ideally, we want to see a budget that provides clear support for the British manufacturing industry and its increasing role in high-tech design and development.

“The rise of 3D printing and big data technologies will transform the way businesses manage logistics and production over the next decade and the Chancellor will ideally send a signal that he recognises this. We’d like to hear support for research and development, apprenticeships and training if we want to build a great British manufacturing powerhouse that’s fit for the future.”

Andrew Betteridge, partner and head of the corporate and commercial teams at Ashfords LLP says:

“Businesses will expect greater certainty about future tax liabilities, which should encourage investment. The Chancellor can do this by delivering the business tax roadmap promised in last year’s summer Budget.”

“Business leaders will hope for a reform of business rates, which can discourage investment in plant and machinery.”

“The Enterprise Investment Scheme and Venture Capital Trusts have encouraged investment in smaller companies. While businesses seeking investment would welcome an increase in the income tax reliefs provided, the chancellor may choose to leave them as they are, given the continued popularity of these schemes and current constraints on public finances.”