More treats than tricks on offe

● UK’S bustling en­tre­pre­neur­ial econ­omy ‘well-equipped for a re­si­lent post-brexit fu­ture’, ac­cord­ing to one com­men­ta­tor

The Scotsman - - Budget 2018 - By EMMA NEW­LANDS

Chan­cel­lor Philip Ham­mond was praised for un­veil­ing a string of mea­sures to sup­port the UK’S en­trepreneurs, with yes­ter­day’s state­ment deemed to be “bring­ing more treats than tricks for busi­ness”.

He stressed the be­lief that en­cour­ag­ing en­trepreneurs “must be at the heart of any strat­egy for a dy­namic econ­omy”.

Steps to re­in­force this in­cluded an in­crease in the an­nual in­vest­ment al­lowance (AIA) from £200,000 to £1 mil­lion for two years “de­liv­er­ing on a long-stand­ing ask of the Bri­tish Cham­bers of Com­merce”, and a tar­geted re­lief for the cost of ac­quir­ing in­tel­lec­tual prop­erty-rich busi­nesses.

Per­ma­nent tax re­lief for new non-res­i­den­tial struc­tures and build­ings was also in­tro­duced. Fur­ther­more, the fund­ing of start-up loans is to be ex­tended to 2021, help­ing 10,000 en­trepreneurs, and it was an­nounced that small and medium-sized en­ter­prises could ben­e­fit from re­duced con­tri­bu­tions for ap­pren­tice­ships.

Carolyn Fair­bairn, di­rec­tor gen­eral of the CBI, said: “This was a rock-solid bud­get, bring­ing more treats than tricks for busi­ness.

“It recog­nises the enor­mous con­tri­bu­tion en­ter­prise has made to bal­anc­ing the UK’S books through jobs, pay and tax and re­sponds to many of the rec­om­men­da­tions that firms have made.”

Tak­ing a sim­i­larly pos­i­tive tone was Luke Davis, founder and chief ex­ec­u­tive of pri­vate in­vest­ment house IW Cap­i­tal, who praised a Bud­get “for the small and grow­ing”.

And he said Ham­mond “pro­vided due ac­knowl­edg­ment to a na­tion of en­trepreneurs who will lead the charge for a buoy­ant pri­vate sec­tor post-brexit”.

He added: “The UK’S al­ter­na­tive fi­nance arena, al­beit buoy­ant, will only flour­ish to its op­ti­mum ca­pac­ity if fis­cal and pol­icy-led ini­tia­tives such as busi­ness rates, en­trepreneurs’ re­lief, VAT, and cor­po­ra­tion tax are ad­dressed headon, par­tic­u­larly with Brexit around the cor­ner.”

“The UK’S en­tre­pre­neur­ial econ­omy is well equipped for a re­silient post-brexit fu­ture.”

Ham­mond also an­nounced an ad­di­tional £200m of fund­ing to the Bri­tish Busi­ness Bank to re­place ac­cess to the Euro­pean In­vest­ment Fund “if needed”.

And that may “al­lay some fears of busi­nesses who have re­lied upon EU grants/fund­ing,” ac­cord­ing to Richard Dil­lea, di­rec­tor at ac­coun­tant Mazars, which has of­fices in Ed­in­burgh, Glas­gow, and Perth.

And he be­lieves that over­all the Bud­get “has com­mit­ted to the en­gine room of the UK econ­omy”, adding that the “gen­eros­ity and con­di­tions sur­round­ing the re­lief for ac­quir­ing ‘IP rich’ busi­nesses are yet to be seen, how­ever, re­lief for cap­i­tal ex­pen­di­ture on such busi­nesses would re­duce the ‘af­ter-tax cost’ and may in­sti­gate fur­ther in­vest­ments/trans­ac­tions”.

He was also among ob­servers to ad­dress the an­nual in­vest­ment al­lowance, and be­lieves that lift­ing the min­i­mum qual­i­fy­ing pe­riod from 12 to 24 months could make the re­lief more dif­fi­cult to ob­tain.

Philip Sal­ter, founder of The En­trepreneurs Net­work, said the in­crease to £1m “will be a wel­come an­nounce­ment for busi­ness own­ers look­ing to in­vest, but by mak­ing it tem­po­rary the govern­ment is fail­ing to of­fer busi­nesses the stable environment they need to prop­erly plan for the fu­ture”.

“Over re­cent years the AIA has yoyo-ed from £100,000 down to £25,000, up to £200,000, up to £500,000, down to £200,000, and now tem­po­rar­ily up to £1m. This is the epit­ome of busi­ness un­cer­tainty.”

He said that all in all it was not a “per­fect” Bud­get for en­trepreneurs, with the likes of busi­ness rates re­lief rep­re­sent­ing “missed op­por­tu­ni­ties for fun­da­men­tal re­form”.

But tak­ing a more pos­i­tive tone was Jenny Tooth, chief ex­ec­u­tive of the UK Busi­ness An­gels As­so­ci­a­tion, who said Bud­get amend­ments “have not come at the ex­pense of a thriv­ing en­tre­pre­neur­ial com­mu­nity”.

“The en­trepreneurs’ re­lief is an in­cen­tive for en­trepreneurs to set up, grow, sell and rein­vest into UK busi­nesses and to con­trib­ute to the na­tions thriv­ing eco­nomic environment… Ham­mond stated that en­trepreneurs are at the heart of our dy­namic so­ci­ety – this is very much the case and the UK’S en­tre­pre­neur­ial spirit will con­tinue to boost our thriv­ing econ­omy through­out Brexit ne­go­ti­a­tions.

“Re­silience plan­ning for Brexit now needs to be of the ut­most im­por­tance across the UK’S busi­ness agenda to en­sure a Brexit-proof econ­omy.”

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