East of England left out of levelling up plans, but drinks and R&D sectors should be pleased

Matt Evans, Tax Director, KPMG in the East of England comments on Today's Budget

Matt Evans, Tax Director, KPMG in the East of England comments on Today's Budget

Responding to the Budget, Matt Evans, Tax Director, KPMG in the East of England, said:

“While the Autumn Statement focused on regional rebalancing, the East of England was not mentioned much in plans to provide a foundation for growth and economic rebalancing. We hope the Levelling Up White Paper will bring further focus to the Government’s efforts to rebalance the UK economy, although it is disappointing to not see more commitment to the East of England within plans to address what the Chancellor referred to as the UK’s “uneven geography”.

“Despite being fuelled by an economy that is growing faster and borrowing less than previous OBR predictions, this was a Budget which recognised the lasting impact of the pandemic and the long road to recovery which many businesses still must make to return to prosperity. Businesses in the East of England will be relieved that no further significant taxation was announced by the Chancellor following a year of measures being introduced. Indeed, some sector targeted tax breaks were unveiled designed to take the UK forward into a new age of optimism.

“Winners on the day include pubs and hospitality who will benefit from reduced business rates in England, and the new alcohol duty Draught Relief, as well as small producers of ciders and other producers of lower ABV drinks where the new Alcohol Duty simplifications will bring some welcome cost reduction. The East of England’s thriving local drinks economy which produces some of the UK’s best cider and wine, certainly has reasons to be cheerful heading into the festive season.

“With a vibrant economy based around innovation we eagerly await details on the reform to the UK’s R&D tax credit regime which is expected to see the scope extended to include cloud computing and data costs, however there is a narrowing of the relief as it is refocused on innovation in the UK only. This news is particularly significant for Cambridgeshire and Norfolk, both areas with booming hubs of innovation.

“Under pressure to reform the business rates system in England, the Chancellor announced a stopgap for some sectors, where firms in the retail, hospitality and leisure sectors will be given a 50 per cent discount on rates for one year and capped at £110k, a move which will be welcomed by operators of pubs, music venues, cinemas, restaurants, hotels, theatres, and gyms. The Chancellor also announced measures to boost business investment by limiting additional rates for businesses in England investing in green technology and for improvements to premises.

“As the East of England’s businesses continue to play a key role in the pandemic recovery, this quiet budget should give some sectors here the stability and security they need to grow.”




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