Recovery Budget for private businesses as investment is incentivised

Responding to the Budget, Shashi Prashad, Private Enterprise Partner at KPMG, said:

“This was a Budget to support the entrepreneurs, SMEs and privately owned businesses that will be looked to for jobs and growth in the coming months and years.

“The super deduction of 130% tax relief on investment in plant and machinery is intended to supercharge business investment and may well do so. By giving it a finite window of two years, the Chancellor is incentivising corporate investment sooner rather than later.

“Combined with the ability to carry back trading losses for three years, even loss-making businesses will be considering whether to invest in future growth now to secure extra relief.

“The review of the R&D incentive and EMI tax regime will be closely followed by businesses considering building on their post COVID-19 investments in digital innovation as well as their workforce; they will be wondering whether the tax system may provide further support as they scale.

“By protecting many of the country’s SMEs from the corporation tax rate rise, the Chancellor has shielded the army of entrepreneurs and employers across the country from the Treasury’s need to recoup tax revenue. And the significant number of privately owned businesses in the retail and hospitality sectors will be both pleased to see the additional support from the new restart grants and relieved that their business rates holiday and reduced VAT rate continue for the short term.

“The well trailed extension to the furlough scheme, meanwhile, gives employers room to breathe as they gear back up to opening, and the doubling of the grant to take on new apprentices may even stimulate new jobs.”

                                                                                    -Ends-

 

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About KPMG

KPMG LLP, a UK limited liability partnership, operates from 21 offices across the UK with approximately 16,000 partners and staff.  The UK firm recorded a revenue of £2.3 billion in the year ended 30 September 2020.

KPMG is a global organization of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 147 countries and territories and has more than 219,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.