Budget Announcements
After waiting with bated breath for George Osborne's latest budget plans, many feel that the resulting announcements could have gone further. In the ongoing climate of austerity, Mr Osborne does perhaps lack the 'wiggle room' of previous administrations, but we do believe he could have done more.
We Would like to see Realistic Plans to Boost Business for SME's
As with many businesses, at Circle Square we would like to see definable and realistic plans to boost business for SMEs. Vague and insubstantial promises of future tax breaks simply aren't enough. One Saturday newspaper journalist has suggested that SMEs could be made exempt from the burden of Employer National Insurance Contributions, on the proviso that this was made effective from 6th April 2013, or soon after this date. We also feel that offering 'stealth allowances' via slowly increasing levels of personal allowance really achieves little of tangible value. The majority of people will barely perceive the difference and the change is hardly likely to provide significant motivation or to encourage further economic growth, or indeed full recovery. And yet the scheme costs the government an awful lot of money. We'd surmise that for the average person, a cut in the 20pc VAT rate would be welcomed far more happily and see an instant effect in retail.
Additionally, we feel that AIA rates are already high enough, so further capital allowances are not a priority. Both the basic rate of income tax and the corporation tax rates for small companies are set at the appropriate levels in the opinion of many. Older people will remember that rates of marginal income tax actually exceeded 100pc in the '60s, so a basic rate of 20pc and a top tier of 45pc cannot appear to be particularly punitive when viewed in the context of history.
What Businesses Really Want to see is a General and True Economic Boost
Capital expenditure on public infrastructure and construction projects provides employment and puts money into the pockets of those workers, with additional PAYE and NIC gains. These people will go and buy items that are subject to VAT. This all benefits businesses and government revenues.
What About Interest Rates?
Regardless of government interference, the low rate of interest matters to few businesses, as the majority still cannot easily access the finance that they need, although the Funding for Lending scheme is starting to show some success. The government will still need to find ways to lend directly to SMEs, or provide incentives or grants, in the face of banks effectively shutting shop when it comes to lending to businesses. Most businesses would like to see true action on this point.
Written by Rachael Hoar of Circle Square Talent -
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