More treats than tricks on offe
● UK’S bustling entrepreneurial economy ‘well-equipped for a resilent post-brexit future’, according to one commentator
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.”