Anthony Andreasen, director at Gosforth-based RMT Accountants & Business Advisors, says: “In a climate where the North East and wider UK economy is continuing to battle against significant headwinds, the Chancellor’s lengthy speech provided some encouragement for regional businesses, but may well have left many others wanting more.
“The increase of the VAT registration threshold from £85,000 to £90,000 will make a difference to some small businesses and self-employed people, and may encourage customers to make new or additional investment with them, but it does not go as far as some had called for and does not fully balance the impact of this threshold having been static for the last seven years.
“The much-trailed reduction in National Insurance contributions for individuals and the self-employed is balanced by the continuing freeze in personal allowances, and with the rate of inflation still well ahead of the Bank of England’s two per cent target, many people are still likely to paying out at least as much as they’re getting back.
“The four per cent reduction in the higher rate of capital gains tax paid on profits from selling residential property may provide some new momentum to a market that has recently been lacking in confidence, while the changes in the child benefit earnings threshold will have a direct impact on the amount of money coming into a significant proportion of households.
“The abolition of the tax reliefs currently available on costs incurred furnishing holiday lets will have a direct impact on the tax situations of the many people who rent out second homes in the region this way, and may encourage some of them, as seems at least partly the Chancellor’s aim, to make their homes available for long-term rental instead, which will help the supply of rental property in popular holiday destinations.
“With the renewables sector becoming an increasingly important part of the North East economy, the commitment of an additional £120m to the Green Industries Growth Accelerator scheme, which will help to build supply chains for new technologies, will be very much welcomed by many regional firms.
“The commitment to full expensing on leased assets has the potential to make a difference to business finances, but with no timeline given on its introduction, this won’t be realised in the short term.”