Categories

Archive

The Marketing Eye Blog << Blog Home

So, how was it for you? Reactions from local businesses to George Osborne's latest Budget.

Posted Wednesday, March 23rd, 2011 by Neil Edwards

So how was it for you?

Angela Ward, Manager, PR Services with The Marketing Eye, interviewed a number of local businesses and professional advisers to gauge their reaction to this afternoon's Budget.

Today’s Budget was, businesses in the South East, generally agreed ‘good and well intended’.

Neil Edwards, managing director of The Marketing Eye said: George Osborne said a lot of the things that small businesses want to hear - making Britain the best place to start up, finance and grow a small business has to be the right aim. However, service businesses in the South East never seem to get a mention and we need a helping hand too. We are looking for more incentives and tax breaks to employ people in the South East.

It wasn’t, however, a Budget with many surprises.

As the Chancellor was speaking, I was struck by how much we already knew - due, no doubt, to the fact that either economists and accountants are getting better in second-guessing what’s coming or perhaps the government is getting better at leaking proposals before they are made public, commented Martin Pollins, managing director, Bizezia. Overall, it looks like a sensible Budget that responds fairly to the concerns of many citizens in the UK.

There were a few ‘headline grabbers’, such as the proposed merger of income tax and National Insurance.

However, this will have political implications about raising tax rates and will need to be carefully considered to make sure it doesn’t hit the ‘wrong’ people, added Keith Hall, director, Feist Hedgethorne.

Nick Green, branch manager of Handelsbanken in Tunbridge Wells, described it as ‘a Budget that appeared to be aimed at stimulating growth and empowering entrepreneurial Britain’. He said that this could be seen in a number of measures, particularly the cut in Corporation Tax, no new regulation for small firms for the next three years and new rules to help planners prioritise jobs and growth.

Martin Pollins pointed out that cutting the Corporation Tax rate by 2% will mean that the tax rate will be the lowest in the G7 and Richard Holme, a partner at Creaseys, agreed that the cut in Corporation Tax is good news.

This will hopefully encourage investment, he added. The rate for smaller companies will fall, as planned, to 20% from next month. More individuals and businesses should now look to channel activities through limited companies to save large amounts of tax, especially if extractions of profit can be deferred.

Another key highlight was that investments under the Enterprise Investment Scheme (EIS) will attract tax relief of 30% (from 20%) form April 6, something described as a ‘step in the right direction to getting people to invest in small and growing businesses’ by Richard Holme.

Kieron Robertson, estate planner and independent financial adviser, Valiant Financial Consultants, added: Increase in entrepreneurs’ relief will also be well received from those in business a doubling of the lifetime limit of gains from £5 million to £10 million.

It was also announced that there will be an increase in research and development tax relief to 200% (and 225% next year), which was described by Keith Hall as ‘an opportunity that smaller companies in the digital community should not overlook’.

Neil Edwards said that there wasn’t much in the Budget to take the risk out of employing staff and to get people back to work and spending again.

He added: We want to grow the business, take on new staff and reward the ones we’ve got. Finding the cash for pay rises is difficult in the current climate and it’s made harder if anything you do offer is negated by inflation and increased NI. I am, however, pleased that increase in the personal allowance will offset the rise in NI for individuals and that steps are being taken to limit the rise in fuel prices. This means any pay rises we can offer will make people better off each month.

There was some relief for first time buyers, which Nick Green said was ‘good’ and Kieron Robertson agreed. He explained: The £250 million commitment to first time buyers provides some solace to those struggling to raise deposits although it is a shame it is restricted to those buying new homes. Will this mean that more school fields are sold off?

The one thing which everyone including said Nick Green ‘the beleaguered motorist and haulage firms’ - was united in welcoming was the measures to freeze the planned inflation rise in fuel duty and reduce it by 1p.

The announcement of a 10% Inheritance Tax discount for those leaving 10% of more of their estate to charity was welcomed.

The charity sector is suffering at the moment so anything that can be done to give it a boost is good news, said Richard Holme. It is also positive for people who wish to leave part of their estate to charity. Donors will need to look carefully at their wills and also plan whether to give to charity in lifetime through gift aid, or on death to save Inheritance Tax.

Kieron Robertson concluded that it was ‘always going to be a hard Budget with so much anguish caused over the last few years (if not longer?) and the borrowing to fund the deficit forecast of £146 billion.

Neil Edwards added that ‘there is still a lot of uncertainty out there’. He explained: Rising inflation rates and threats of increases in interest rates don’t help. In the absence of confidence, we need our costs held down and the ability to leave as much profit in the business as we can to re-invest - not paying it all out in tax.

What did you think of the Budget? Share your thoughts and we'll share them across our network.

Posted Wednesday, March 23rd, 2011 by Neil Edwards

Other Articles In This Category

• Feeling the pulse of business confidence

  The recent news that the UK economy is in a double-dip recession makes dismal reading. The Prime Minister described the figures as ‘very very... read more
  9th of May 2012 by Neil Edwards

• Our clients share their views on Budget 2012

  At The Marketing Eye, we always enjoy gathering our clients' reactions to the Budget when it is announced. With a broad range of clients to call upon, our... read more
  21st of March 2012 by Neil Edwards

• Autumn Statement Blues

  George Osborne's Autumn Statement served up few surprises and gave professionals and business owners alike very little to be cheery about. We asked a selection... read more
  30th of November 2011 by Neil Edwards

• Local SME's should not be bowed by global events

  August was a pretty challenging month for the global economy with the Sovereign debt crisis impacting on the Eurozone, the US credit rating being downgraded... read more
  3rd of September 2011 by Angela Ward

• Stick or Twist? Where next for interest rates?

  The Bank of England's Monetary Policy Committee recently announced that UK interest rates are being kept at the record low of 0.5%. This is the 27th straight... read more
  16th of June 2011 by Neil Edwards

• Local entrepreneurs speak out on Budget wishes

  With the Budget just around the corner (Wednesday 23 March), we canvassed some of our clients a mixture of business owners and professionals for their Budget... read more
  16th of March 2011 by Neil Edwards

• For business' sake - interest rates must stay low

  With inflation at 3.7%, why is everybody starting to advocate increasing interest rates?The inflation in the economy is cost-push, not demand-pull. Simply put,... read more
  18th of January 2011 by Neil Edwards

• Osborne navigates the South East economy across thin ice

  Chancellor George Osborne was optimistic in his update to MPs on the health of the UK economy during his autumn statement today, but life is likely to remain... read more
  29th of November 2010 by Neil Edwards

• Woolies to expand

  In an update to our post of February 2009 about the re-launch of Woolworths, it was interesting to read in Retail Week this week that Woolworths.co.uk has... read more
  7th of July 2010 by Neil Edwards

• Time to decide

  So, after what seems like months of campaigning it is now decision time.The Conservatives have the clearest and most favourable policies for business and if my vote... read more
  5th of May 2010 by Neil Edwards

• Are Tories taking the high ground in battle for business votes?

  At long last, I've had a reply from the Conservatives - a comprehensive and persuasive reply at that. The question is, do we believe there are £6bn of... read more
  8th of April 2010 by Neil Edwards

• A budget for business?

  For the last few months I have been engaged in a simple, yet seemingly naive quest to get some clarity from each of the political parties on their policies for... read more
  24th of March 2010 by Neil Edwards

• Which way to vote? Finding the party for small business.

  I am a floating voter.I can’t ever recall having been so interested in the outcome of an election and my vote is there for the taking by the party that can... read more
  21st of February 2010 by Neil Edwards

• Cut to grow - a plea to politicians on behalf of small businesses

  With the growth of our business being at the top of my agenda, I find myself paying closer attention than ever to the political situation. Like England's... read more
  3rd of October 2009 by Neil Edwards

• Reasons to be Cheerful - Part 1

  'Tis a brave man indeed that calls the bottom of the market. Surfing through the week's headlines we have seen: Rate of decline in UK commercial... read more
  9th of May 2009 by Neil Edwards

• Not a recession, it's the new normal

  According to Sir John Gieve, the outgoing Deputy Governor of the Bank of England, Britain is at risk of being in recession for the next 10 years.That being the... read more
  24th of February 2009 by Neil Edwards

• Cut VAT? Will somebody please explain

  So, the great white hope is a cut in the rate of VAT.Forgive me, but aren't prices set according to supply and demand (or has the free market gone for ever... read more
  25th of November 2008 by Neil Edwards

• How will you survive or thrive in the recession?

  The latest blog is a guest post from friend of The Marketing Eye, Sharon Wilding.It seems that everyone, including the Prime Minister, now agrees that the UK is in... read more
  28th of October 2008 by Neil Edwards

• Interesting

  We have a number of clients that trade internationally and we are, of course, all interested in what is likely to happen in the UK. We helped our clients, Creaseys,... read more
  24th of October 2008 by Neil Edwards

• Doom and Bloom

  Yesterday, we were at an economic briefing given by Tom Vosa, Head of Market Economics UK at National Australia Bank. His commentary was both enlightening and... read more
  7th of October 2008 by Neil Edwards