Credit, Collections & Insolvency News
Chancellor Jeremy Hunt has unveiled new measures to help businesses and shops. The measures include freezing the business rates multiplier for another year, meaning that rates will no longer be increased in line with inflation from April.
The Chancellor said that a revaluation of business rates would go ahead as planned next year but that he would soften the blow with £13.6bn worth of tax cuts over the next five years.
The Chancellaor also said that he will maintain the current VAT registration threshold at least to 2026.
Kitty Ussher, Chief Economist at the Institute of Directors, said “Business leaders were so dismayed by the fall-out from September’s mini budget that the bar for judging today’s announcements was set pretty low. To that end it was good to see joined-up working between the OBR and the Treasury this time round.”
“On tax, while low rates of tax are always welcome, we understand that it was proportionate to announce in March 2021 that corporation tax should rise in April 2023 as a way to pay for the pandemic and are pleased that the headline rate of employer NICs has been maintained at its lower rate given the huge cost pressures on business.”
“In the longer term, however, today’s Autumn Statement will be judged on whether it set the stage for a sustained period of growth once the current difficulties have eased. The Chancellor rightly recognised the importance of capital investment, citing the Sunak Mais lecture from earlier this year. But he failed to follow through on one of the key elements of that speech, namely the possibility of using tax policy to incentivise employers and sole traders to upskill in national skills shortage areas.”
“As a result there remains a hole in government policy around how to address adult skills shortages. We would like to see a comprehensive and systematic plan to anticipate and address labour shortages across the whole economy, not just – as he announced today – in the NHS. We are calling on government to establish an independent Shortage Occupations Agency to advise on a granular list of priority skills and to be bolder in what it will do to achieve change, including incentivising organisations to train up their staff to meet national skills shortage needs.”
“In the longer term, raising the productive potential of the economy through supply-side measures is the way to reduce both inflationary pressure and the pressure on government borrowing for budgets to come.”
Mark Supperstone, Managing Partner at ReSolve said “The Chancellor has painted a fairly bleak outlook for the British economy, which he confirmed is now firmly in recession facing record inflation, high interest rates and soaring energy prices. All this spells a tough winter ahead for UK businesses and today’s announced increase to the National Living Wage rates from April 2023 may prove another headwind to struggling SMEs in the New Year.”
“However, businesses should take some comfort from the £13.6bn business rates relief package, unveiled today, along with a pledge to maintain the energy support package to business, although it may not be enough to save some already struggling firms from closure.”
“It remains to be seen if the Chancellor’s £55bn fiscal tightening package, which includes income tax increases coupled with reduced public spending will further spook consumer spending in the lead up to Christmas.”