CGT/Founder’s relief
“The Chancellor seems to have disappointed quite a few people by resisting the invitation to do something dramatic, although I’m sure business owners would rather take an underwhelming Budget over more upheaval or uncertainty.
“I’m pleased that the Chancellor seems to have reacted to the outcry from business owners and entrepreneurs about what a hike to CGT would do to those considering taking on investment from Private Equity and the incentives for entrepreneurs to set up businesses going forward. People who’ve spent decades building a company from nothing will feel quite strongly about how much of the proceeds of its sales should go to the treasury, and the maths seems to strongly indicate that an increase here would lead to a decrease in tax receipts, rather than an increase.
“In truth, I don’t think it matters all that much exactly where the rate sits. A lower rate would encourage entrepreneurs to create new businesses, and a higher rate could (in theory) offer a welcome influx to the government coffers. Either way, it would be nice to have a rate we can plan around in the long term. We’ve had a half dozen Chancellors and ten major fiscal statements since the end of lockdown, with precious little confidence that any one measure would last even into the medium term. I could live with a rate that I didn’t agree with, so long as I knew it would stay put long enough for people to make long-term investment decisions.”
Access to scale-up capital
“With so much of this Budget devoted to growth and investment, I do wonder how many owners will come away knowing where to go for the funding that’s supposed to help them expand. You can put a considerable sum behind a scheme and still leave someone running a perfectly good business scratching their head about whether any of it is available to them.
“A clear system for finding and applying for that support deserves as much attention as the amount being allocated. Owners need to understand which options fit their plans and who they should be speaking to, preferably without having to become experts in the Government’s various funding programmes. If we’re hoping they’ll get on with growing their businesses, we should at least make that part of the exercise straightforward.”
Investment incentives/capital allowances
“Anything that encourages owners to invest in growing their businesses is welcome, and I’d like to think the Government is prepared to give these incentives a decent run. If you’re committing money to an expansion that could take years to pay off, you’ll need some confidence that the underlying arrangements you’ve based your sums around will still be in place when you get there.
“We do seem to ask businesses to think long term while giving them a succession of short-term policies to work around. Owners will naturally plan around the incentives available, so the Government has some responsibility for how far ahead they feel able to look. I’d happily see a few Chancellors forgo the pleasure of announcing something new if it meant businesses could get on with the investments already being planned. Sadly though, the perceived political benefit of these announcements seems to outweigh the economic benefits when it comes to deciding what to do.”
Tax simplification/reduction in SME administrative burden
“I suspect anyone who’s tried to make sense of the tax system while running a business will welcome simplification, although they might reasonably ask how we ended up with quite so much to simplify. Larger businesses may be able to afford people to work through it all; smaller firms, however, have to either shell out for advice or have someone down tools to decipher the rules. Anyone who has had to thumb through a copy of Tolley’s Tax Handbook (and the many volumes it now runs to) would sleep easier knowing a new volume was not coming any time soon.
“There’s also the taxpayer’s bill for each revision, since someone has to write the guidance and administer whatever’s just been announced. It strikes me that skipping this exercise each time would save everyone work, money, and headaches for as long as the government can resist the temptation to start meddling again.”
No headline tax increases
“I’m pleased we’ve got through this Budget without another increase in headline business taxes, and I imagine plenty of owners would be quite happy to go a few years without having to acquaint themselves with another set of changes. They’re making decisions about investments that could take years to pay off, so knowing what tax arrangements they’ll be operating under is always welcome.
“There seems to be a temptation for every incoming occupant of Number 11 to put their own stamp on proceedings, which must get a little wearing for anyone whose business plan outlasts the average Chancellor. I’d like to see the Government give these arrangements enough time to become something owners can confidently build into their plans.”
