As Chancellor Jeremy Hunt prepares to unveil the Autumn Statement this Thursday (17th November) as he seeks to fill a reported £60 billion black hole in the public finances, three business leaders in the North East outline their hopes and fears.
Lee Watson, tax partner at Clive Owen LLP, which has offices in Darlington, Durham, York, and Middlesbrough, suggests that the Chancellor should consider the continuation of the super deduction to help businesses continue to invest.
He said: “The government introduced the super deduction to give almost 25% tax relief on the cost of new plant, machinery and commercial vehicles, whilst the headline corporate rate of tax was 19%. The super deduction is due to end in March 2023 but with the country facing a potential recession and corporate tax set to rise to 25%, the government could introduce another super deduction to encourage companies to continue to invest.”
Chris McDonald, chief executive officer of Teesside-based Materials Processing Institute and Policy Chair for Innovation and Enterprise at the Federation of Small Businesses, said: “The budget has already been characterised as one that will raise revenue whilst cutting spending.
“However, I believe it’s important not to lose sight of small businesses, which are currently coming under great cost pressures, but remain vital to deliver the future growth in the economy that this country needs.
“Accepting the government’s need to raise more money, I hope it will seek to shift the burden away from cash-strapped small businesses and instead bring forward measures that support small business investment, such as positive changes to Research and Development (R&D) tax credit definitions that I discussed while giving evidence at the House of Lords Finance Bill Committee last week.”
Chris Donabie, partner at Newcastle-based Naylors Gavin Black, the North East’s largest independent commercial property consultancy, added: “The possibility of rising business rates is concerning many business owners and property investors. Anything which sees rates rise – either by removal of relief, an increase to match the rental market or inflation – will sound the death knell for many hospitality and retail businesses, further drive inflation and deter development.
“While business rates are long overdue an overhaul, now is the time to provide stability and certainty while inflation is brought under control. A commitment to fixing rates for another year will give a cushion to business and investors and ensure that rising costs aren’t passed on to the consumer. Going further, removing business rates on new commercial developments until a tenant is secured would actively encourage speculative development and provide a welcome boost to supply chains.”