Budget 2014: wish list
With the Chancellor’s budget almost upon us, there will be much speculation about what it might hold, and growing pressure from consumers and businesses to introduce some measures which may help ease the effects of the recession. A survey just out revealed that businesses want a ‘boring’ budget – with certainty and stability at the top of the wish list.
From a business perspective, there are certainly some measures on our wish list which we think could make a difference for small businesses trying to thrive and grow – and potentially become the big businesses of the future, helping to safeguard jobs and the local economy.
Firstly, a reduction in small company corporation tax would be a welcomed measure; a tax free band on the first £10,000 of company profits, before hitting the 20% tax rate. This was in place several years ago and can make a world of difference to small businesses, especially following difficult economic conditions.
Increased Annual Investment Allowance for capital allowances for purchases or investments made on business assets would also help SMEs when thinking of purchases common business assets, whether they be machines or office equipment and furniture.
We must also look at the other end of the scale – PLCs paying little or no tax is putting a huge strain on the economy and should be scrutinised and addressed. In addition, a reduction in employers NIC and tax breaks on NI when employing additional people could help businesses thrive and grow and encouraged to employ more staff, creating further jobs.
There is clearly a limited pot and not everyone can have their way, so funding these measures will always be the challenge. However, increasing corporation tax on profits over £500k could be one way to help these measures take shape.
Uncertainty can be a real hinder to business growth as firms are looking to minimise their risk at all times – so the Chancellor must ensure that the right decisions are made for businesses to be able to feel stable in growth plans. Business growth is the kingpin of sustainable economic growth, so we do hope the Chancellor will ensure the stability of the recovery in tomorrow’s budget.