Chancellor urged to boost business support in the Budget 2014
Monday, March 17, 2014
Business groups including the BPIF, Institute of Directors (IoD) and Forum of Private Business (FPB) have called on the chancellor of the exchequer to step up support for businesses in his penultimate budget before next year's General Election.
With the final budget of this parliament scheduled to take place on the eve of the May 2015 election, this week's budget is George Osborne's last chance to make any meaningful changes to fiscal policy before his appointment with the electorate.
BPIF chief executive Kathy Woodward warned that this ruled out the hope for "really ground-breaking initiatives around youth job creation, pension investment and regional stimulus" adding that the chancellor's speech probably wouldn't stray too far from what has been previously announced.
This includes measures from the last budget and autumn statement such as the £2,000 employers allowance due to come in on 1 April 2014 and the NIC exemption for employing under-21's due to come in from April 2015.
Woodward added: "Print and media's fortunes to a large extent reflect the health of the wider economy so priorities are to support the recovery with 'greater forward security' particulary around the cost of energy, the continuation of investment tax relief initiatives and stimulus to the very large number of SMEs that are the foundation of opportunity in the UK."
Business owners will certainly hope Osborne continues to improve the tax and regulatory environment in line with his stated aim of making Britain the "best place in the world to do business" and the IoD has outlined three key steps to achieving this.
These include: an increase in the 40p tax threshold to £45,000 - a move the IoD predicts will only cost £1bn while helping the "squeezed middle"; making it easier for businesses to file tax returns and improving the ability to transfer losses between group companies; and freezing business rates for the two years while moving to a more regular adjustment than the current five-year revaluation.
Meanwhile, the Forum of Private Business has called on the chancellor to take steps to: reduce the cost of doing business; increase small business access to finance; cut the cost of red tape; and encourage investment and sustainable growth.
To reduce the cost of doing business it has called for any rises in minimum wage to not be above inflation, as well as a review of business rates and fuel duty, including the potential phasing out of VAT on the fuel duty element of pump prices.
In terms of improving access to finance, the FPB has split its proposals into ones designed to tackle late payment - such as making it compulsory for PLCs to publish the length of time they take to pay suppliers - and moves to support lending, such as making it easier for small firms to get bank data to share with other lenders when seeking additional finance.
Meanwhile, accountancy firm KPMG has predicted that the chancellor could use Wednesday's budget speech to bring forward next year's reduction in corporation tax, meaning the main rate would drop from 23% to 20% rather than falling to 21% this year and 20% the following year.
It has also speculated that the NIC exemption for employing people under the age of 21 could be brought forward by 12 months to 1 April 2014.
Lastly, KPMG picked up on Osborne's speech in Hong Kong last month, in which he alluded to restoring the UK's manufacturing base, as a signal that the government could announce an extension to capital allowances - perhaps to include structures and related buildings.
What would you like to see in the Budget 2014? Post your comments below or tweet us @printweek with your wishes and predictions.