Three pre-Budget comments
Ahead of the Budget this Wednesday, commentary from three different sector directors. These are, Peter Burgess, director at Retail Human Resources, a London-based recruitment company; Vince McLoughlin, partner at Russell New, a firm of business & tax consultants; and Earl Yardley, director at Industrial Vision Systems, a supplier of machine vision solutions to industry.
Earl Yardley, said: “The Government must ensure that the announcements made at the Summer Budget provide a positive outlook for UK manufacturing. The more investment and tax breaks within this space, the more stability there is for key industries, such as pharma, medical device, and automation, which, in turn, will also enhance the performances of UK engineering firms. The Chancellor should ensure he fulfils his promise previously set prior to the election that the annual investment allowance (AIA) for capital allowances will be kept at £500k. We have already seen a significant increase in investment made in new automated production lines and cells across the UK manufacturing base. By establishing a long term rate, this would boost productivity and help leverage the UK at the forefront of the global manufacturing sector.”
Peter Burgess, said: “Changes must be made to the Right to Buy scheme. Not only is it morally wrong but is economically illiterate. Basically the Government has given a pot of money, estimated to be worth approx. £5bn, to a group of people they hoped would vote for them. I doubt if they even did and the explanation given as to how this is to be funded is even more bizarre. The Government says it will fund the rebuilding of homes sold at a discount from housing associations through the sale of council houses in expensive areas. If this is the right policy – and I am not sure it is – then the £5bn they think it will raise would be better spent on the building of new homes elsewhere, or indeed on any of the other far more worthy causes that need government money. Otherwise this could provide serious damage to an already broken housing supply.”
Vince McLoughlin, said: ““Inevitably Osborne will outline more plans to tackle tax avoidance and aggressive tax planning by the rich. He will face little opposition from the business community – specifically to his plan to raise over £5bn from targeting evasion and “aggressive” avoidance. But this doesn’t help the majority of businesses and we must also see confirmation that the annual investment allowance (AIA) for capital allowances will be kept at £500k. By committing to a long term rate, Osborne will provide stability and consistency for firms that like to plan and invest for the long term, many of which may be delaying investment plans waiting for this announcement. If he does confirm that the rate will be kept at this higher level this would kick-start the kind of investment needed to enable businesses to thrive.
“He also needs to deliver on election promises that were made. These include raising the income tax personal allowance to £12,500 by the end of the term, meaning no tax is paid on earnings below that amount. I assume he will give a figure from next April, possibly £11,100. Pension relief will once again be targeted. We don’t seem to go many years without a change there. Tax relief has always been an important and attractive factor as far as funding for a pension is concerned. Restricting the amount of relief is an obvious target for the Chancellor at a time when he has guaranteed no increase to other core elements of the tax system.”
