Yesterday was an incredibly important day for small businesses across the UK as the government announced its autumn budget.
There were positives and negatives to take away from Chancellor Rishi Sunak’s plans – we’ve summarised some of the key changes that will affect small UK businesses below:
- Retail, leisure, and hospitality sectors will see a 50% business rate cut for 12 months – the maximum discount will be £110,000
- Business rates remain in place – however from 2023, the existing system will be made fairer. This includes a green investment relief to encourage businesses to lower carbon emissions
- National Living Wage will rise from next year to £9.50 an hour
There were plenty of other crucial announcements made that could impact your business, to find out more about these changes check out our roundup and analysis of the autumn budget.
The aftermath: are small business owners pleased or disappointed with the budget?
Now the government’s autumn budget plans have been unveiled and the dust has settled in the commons chamber, small business owners have had the opportunity to read through the announcement and take stock.
We asked SME business owners around the UK whether the budget is a positive, a negative, or a bit of both, here are (just some) of their responses…
It’s a short-term plaster over a much bigger problem in high streets the length and breadth of Britain.
“There were some positive announcements in the Budget, such as the one-off 50% discount on business rates for retail, leisure and hospitality businesses, and next year’s business rates multiplier being cancelled, however, they will only benefit a small number of small businesses and multiple sectors have suffered blow after blow since the pandemic began.
The needs of small businesses should be at the centre of the Budget. They are at the heart of local economies and communities and it’s high time to level-up business support for all small business owners. The rates relief will be of some help to small businesses in certain sectors, but we fear it will not be enough. It’s a short-term plaster over a much bigger problem in the high streets the length and breadth of Britain. A more long-term approach needs to be taken towards modernising and supporting the long-struggling high streets that have been decimated by the pandemic.”
We massively applaud the freezing of fuel duty.
“We massively applaud the freezing of fuel duty by the Chancellor this afternoon. It’s certainly hard at the moment to balance the books for the country but as an e-commerce website our business relies on the transportation of goods through carriers, and we’ve seen the increase in their costs to us rising rapidly.
Obviously, the price of petrol at the pumps is still also rising and we don’t know how long for or to how high this will increase so there is still that uncertainty, but at least we can be assured that we don’t face a double whammy of rising fuel price and an increase in the fuel duty too, which would have severely impacted the prices we are paying”.
The Chancellor is right to focus on boosting skills in high value sectors.
“The Chancellor’s commitment to increase skills funding by £3.8bn over the parliament is music to my ears. For almost 20 years, I’ve been highlighting the significant skills gap that exists particularly amongst small UK business owners. The Chancellor is right to focus on boosting skills in high value sectors such as AI, cybersecurity and nuclear.
But we also need to equip people with the skills needed to run and grow successful businesses including sales & marketing – perhaps an undervalued profession in the UK but key to getting start-ups off the ground. It’s this skills gap that’s preventing 63% of worthwhile small businesses from securing investment and successfully scaling up, according to a survey we conducted recently. Small businesses were amongst the worst-hit by the pandemic. As we look to rebuild the economy, we should focus on investing in skills that will help them get back on their feet.”
This is a crushing disappointment for the hospitality sector.
“In today’s autumn budget, the Chancellor ignored the widespread call from the hospitality industry, including 200 bosses, for the VAT rate on hospitality businesses to be held at 12.5%. This is a crushing disappointment for the sector.
The UK tourism sector was badly hit by the Covid-19 pandemic and was hoping for an extension of the VAT cut to help efforts to rebuild. This is a massive blow to the cinemas, theatres, festivals, restaurants, pubs, hotels, theme parks and zoos around the whole of the country. Businesses were hoping that the Chancellor would allow them to enjoy another summer with the lower VAT rate, encouraging people to holiday in the UK. Instead, they have been disappointed yet again. “
There’s an enormous disconnect between the conference being hosted here in Glasgow to the budget we just saw.
“In the year the UK is hosting COP26, it is surprising that so little investment is being directed towards the climate crisis. There’s a significant lack of sustainable green measures included in Sunak’s budget, such as carbon taxes or further details on spending plans to ensure the UK reaches net zero.
Whilst it’s extremely promising to see education funding included so firmly, with the education of around 38 million children disrupted each year by climate crises, it’s time for the government to focus that budget on including climate change education on the national curriculum.
There’s an enormous disconnect between the conference being hosted here in Glasgow to the budget we just saw. Young people are engaged, often scared and ready to be proactive. When will it finally become a priority for our government to equip them with the tools for the extreme issues their futures are facing?”
These schemes will create a tech workforce of diverse talent.
“There is a global shortage of talent in technology, particularly cybersecurity and those specialising in AI and SSD, so the UK government’s £3bn investment in skills and education is welcome news. Seeking employees from other parts of the world is one way to plug the skills gap, but nurturing local tech talent is absolutely crucial. Indeed, other countries have realised this before – in Singapore we have initiatives from Enterprise Singapore and the Workforce Singapore Agency’s talent matching efforts, for example.
For the UK, the increased investment in T-levels and the adult Skills Fund are two positive initiatives. What’s more, the 24,000 traineeships and £550m towards skills boot camps in areas such as artificial intelligence and cybersecurity is incredibly exciting. These schemes will create a tech workforce of diverse talent with different ages, genders, nationalities, and domains to create an impactful and innovative environment in the UK and beyond.”
The government is determined to make the UK an international hub of innovation and technological advancement.
“My view is that the government is determined to make the UK an international hub of innovation and technological advancement and offering tax reliefs to companies that conduct R&D activity is an important aspect. Today’s announcement is, in part, aimed at widening the scope of companies that may qualify for relief.
The government also recognises that based on the total R&D spend in 2019, only 53% was carried out by privately financed companies in the UK. Reliefs will therefore be refocused towards innovation in the UK.
As for other changes, the decision to extend the annual investment allowance limit of £1m to 2023 will be welcomed by those unincorporated businesses that do not qualify for the super deduction and are embarking on a capital expenditure programme.
I think the big story of this budget is what was missing. No changes to capital reliefs or tax rates, which many expected. Good news for many clients who are contemplating a sale or undertaking planning involving CGT and IHT mitigation. There were also no changes to the pension’s allowances so good news for those looking to fund their pension pots or looking to retire in the near future.”
The hospitality sector is the UK’s fourth largest employer – it deserves more than a minimum recovery effort.
“The hospitality sector’s recovery is far from over – and the Chancellor is right to acknowledge this. Indeed, the 50% discount to business rates and the simplification of alcohol duty will undoubtedly help many businesses to remain on track with their progress plan.
That said, this is just one piece of the puzzle. Uncertainty surrounding the Government’s ‘Plan B’ restrictions and rising operational costs remain prominent threats to the recovery and growth of many hospitality businesses. The Government should therefore look to go even further with its support to the sector – after all, the changes will only go so far if the Chancellor follows through with the intended VAT return to pre-pandemic levels.
The hospitality sector’s revival post-Covid remains tentative, and the Government is right not to rock the boat just yet. However, more can and must be done to support the industry. After all, the sector is the UK’s 4th largest employer – it deserves more than a minimum recovery effort.”
It is clear the business community is divided on its overall opinion of the autumn budget. A definite positive held by the majority is the government’s commitment to increase skills funding, especially in high value industries like AI and cybersecurity.
However, the general consensus regarding the reintroduction of the 20% VAT fee is one of disappointment, particularly as many businesses in the hospitality sector are still recovering from the pandemic.
via https://www.AiUpNow.com
October 28, 2021 at 12:39PM by Ross Darragh, Khareem Sudlow
