Responding to the 2017 Autumn Budget, Mike Cherry, Federation of Small Businesses (FSB) National Chairman, said “With costs rising and consumer demand flagging, small firms will welcome today’s business-friendly Autumn Budget. It was good to see the Chancellor’s speech acknowledge our concerns about the VAT threshold. Dragging thousands of more small firms into the hugely complex VAT regime would have caused a significant drag on output at an already challenging time for businesses. We look forward to working with the Government to reform this burdensome tax. Small firms spend more than a working week a year complying with VAT obligations on average. It’s time that should be spent growing their firms.”

“The promise to tackle VAT evasion by online overseas sellers is welcome. No business should be gaining an unfair advantage by evading tax. The end of the staircase tax will throw a lifeline to thousands of small firms that had no time to prepare for this completely unfair and retrospective levy. The Chancellor has done the right thing by reinstating original business rates bills. We hope the end of the staircase tax marks the first step towards wholesale reform of the regressive business rates system.”

“FSB has campaigned for CPI-indexation of business rates bill increases for months now and it’s good to see that the Chancellor has listened to the small businesses that would have been hardest hit by an RPI-linked increase. A move to three-yearly revaluations will go some way to making the rates system fairer over the long term. However, the delivery of this pledge must be carefully thought-through. It can’t be allowed to inadvertently place additional burdens on small firms or require them to hire a surveyor just to get their bill right.”

“With the Brexit clock ticking, other nations are trying to tempt our small firms to their shores. We absolutely have to make the UK the most attractive place in the world to invest in innovative firms. Today’s announcement of an additional £2.5 billion for the British Business Bank to continue their vital work in facilitating access to finance for small firms will help make that happen. Freeing up pension funds to put more money behind innovative small firms will also add to our international competitiveness.

“Overall, this is a business-friendly Budget. The Chancellor’s vision for an inclusive economy includes a set of measures that will boost confidence across the small business community as they face extremely challenging trading conditions. The economic outlook remains extremely troubled, with high costs of doing business and inflationary pressures hitting confidence and deteriorating productivity and growth. New public sector headline investment will help, to scale-up the British Business Bank by two thirds as well as in research & development, local infrastructure, SME house-building, broadband and training. This must now be followed by practical detail in an ambitious Industrial Strategy next week.”

Reacting to the Chancellor’s Budget, Michael Izza, ICAEW Chief Executive, said “The Autumn Budget has brought home the fiscal and economic challenges facing the UK. Our debts continue to grow and eliminating the deficit is rapidly becoming a five parliament problem and a millstone for future generations. Turning round the slowdown in the UK economy has to be the immediate priority. This will require new, creative approaches to improving productivity which despite all the efforts remains stubbornly low. Businesses need to match Government investment in skills and new technology if the UK economy is to recover its momentum.”

“The Chancellor resisted the temptation to introduce even greater complexity to the tax system, especially for small businesses. But once again, he missed the opportunity to start the long overdue job of simplifying it. The current tax code is bloated and complicated. It remains a regulatory burden for business that undermines confidence, quashes entrepreneurialism, and inhibits growth. But it is also becoming out-dated, if not obsolete.”

 

Responding to the Chancellor’s Autumn Budget announcement that online marketplaces like eBay and Amazon will be made jointly liable if sellers on their platforms fail to pay their VAT, Michelle Dale, VAT Manager at UHY Hacker Young, the national accountancy group, comments: This is an enormous new power for HMRC, and the taxman is clearly targeting a sea change in attitudes among the online marketplaces. Ecommerce platforms will see this as a bombshell.”

“Unpaid VAT on online sales has become a huge issue in recent years, and has cost the Exchequer a vast amount in potential lost revenues. The cost to the major platforms if they fail to police their sellers properly is now potentially massive.” The ecommerce platforms will resent the idea that they will have to act as a branch of HMRC, not only collecting revenues but sharing the admin burden too.”