Quiet budget will be welcomed by business

Responding to the Budget, Vishal Chopra, KPMG Private Enterprise Tax partner, said:

“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.

“With major announcements for corporation tax rising to 25 percent, the introduction of the Health and Social Care Levy and increases to National Insurance Contributions all being announced earlier this year, many businesses will be relieved that no further significant taxation was announced by the Chancellor. Indeed, some sector targeted tax breaks were unveiled designed to take the UK forward into a new age of optimism.

“Under pressure to reform the business rates system in England, Rishi Sunak announced a stopgap for some sectors, where firms in the retail, hospitality and leisure sectors will be given a 50 percent 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.

“Firms looking at capital expenditure will enjoy enhanced tax relief as the Annual Investment Allowance is extended at its current annual rate of £1 million through to March 2023, to coincide with the end of the super deduction tax relief announced by the Chancellor earlier this year. Further details are also to be released on a 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 a narrowing of the relief as it is refocused on innovation in the UK.

“As predicted, this Budget has been defined by the areas which weren’t announced such as wealth taxes and reforms to Capital Gains and Income Taxes. 

“SMEs were looking for a quiet budget, and certain sectors will be feeling more optimistic about the future than they have for some time, including those dependent on domestic flights where changes to Air Passenger Duty have been announced.  Winners also include pubs who will benefit from reduced business rates in England, and alcohol duties, as well as small producers of craft beer and ciders where a new alcohol duty relief will be introduced, and the creative industries where tax reliefs are extended and reformed.

“As the UK’s private businesses continue to be the engine room of growth for pandemic recovery, this quiet budget should give some sectors stability and security to grow.”

 

-ENDS-

 

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