Budget: Osborne facing calls to cut red tape and boost housing market

Measures to boost the housing market and support small companies are on the wish list of business leaders and advisors in Devon ahead of this year’s Budget.

Chancellor George Osborne is preparing to deliver his statement to the House of Commons on Wednesday, and as ever he is not be short of advice or calls for action.

Housebuilder Barratt is among the businesses hoping for further support from the Government.

Barratt Exeter managing director Tim Larner: “Government support for the UK housebuilding industry remains strong with a range of initiatives in place designed to support house purchases and stimulate growth.

“The NewBuy mortgage indemnity scheme is now in place and working well, supported by reductions in mortgage rates for the product. The Government’s Funding for Lending Scheme should also provide a boost to the market as the lack of bank lending remains the key constraint to industry growth.

“We would welcome any Budget measures to streamline the release of public sector land and those which increase the confidence of both lenders and buyers.”

Jackie Bligh, who runs TaxAssist Accountants in Exeter, Torquay and Paignton, believes a freeze on business rates could make a major difference for small firms.

“Freezing business rates would give a major boost to many local businesses,” she said. “We would also like to see the Chancellor increase the VAT registration threshold and widen the employer’s National Insurance contributions holiday for start-ups.

“These simple measures would provide significant savings for many small businesses across Exeter allowing for more businesses to survive and grow.”

Paul Aplin, tax partner at AC Mole & Sons and chairman of the tax faculty technical committee at the Institute of Chartered Accountants in England and Wales, agreed the Chancellor must help small businesses.

“Reducing red tape doesn’t cost the Government anything, but it frees small businesses to do what they are best at: creating jobs and driving economic growth,” he said. “Although the Government has set targets for reducing red tape, many small businesses think it is actually increasing. The new PAYE Real Time Information (RTI) requirement to report payments at the time they are made, or within seven days, will increase the burdens on many smaller businesses.

“If I could ask one thing of the Chancellor it would be that he does something positive to reduce burdens on these businesses. Easing the RTI rules to reflect the realities of small business life would be a good start.”

Lloyds TSB Commercial Banking has set out a range of measures it hopes will feature in the Budget in order to support SMEs, encourage investment and restore confidence.

These include continued generous tax relief for capital spending, to encourage businesses to invest; an extension of Seed Enterprise Investment Scheme; and more investment in digital infrastructure.

Paul Spencer, relationship director for Lloyds TSB Commercial Banking in the South and West, said: “Any measure that helps to encourage growth and enterprise will be welcome. Businesses need confidence if they are to invest and further tax relief on capital spending would help. We would also welcome any further support that the Chancellor could give to start ups through more time for the special benefits under Seed EIS, to ensure that more young businesses are aware of the help that is available to them.”

The British Property Federation has called for relief from empty rates to be extended to allow businesses to bring vacant shops, offices and factories back in to use, as figures showed that local authorities collected £1.1bn in empty property rates in 2011/12 – up from £970m the year before.

BPF chief executive Liz Peace said: “As well as distorting investment decisions and causing hardship to already struggling businesses, we can now see that empty rates are draining more than £1bn a year from those holding unproductive property – money that could be saved to support jobs or re-invested to bring these properties back into use.

“These figures reinforce a picture of ever-increasing costs to developers, at a point in the economic cycle when Government should be doing everything it can to remove barriers to development and investment in the built environment. The growing tax burden is making positive, growth-enabling development and investment decisions even harder in what are already challenging economic conditions.”

Meanwhile, RICS has called on the Government to act on its promises and deliver the funds needed to boost the housing market and provide much-needed infrastructure.

Luay Al-Khatib, RICS director for the South, said: “RICS is urging Government to increase finance liquidity for construction firms, homebuyers and small businesses. Every pound invested in construction provides around £2.80 of benefits to the wider economy, and if the UK is to work its way out of the economic slump, ongoing investment in construction will be crucial.

“Indicators suggest that Funding for Lending has been a shot in the arm for the housing market. In light of this progress, now is the time for Government to free up more capital and provide more opportunities for would-be buyers and small businesses.”

Mat Scott, tax director at KPMG, added: “Put simply, businesses want policies that will kick start economic growth and give them the confidence they need to invest. Drilling down into the detail, I would hope to see the reintroduction of tax incentives to encourage companies to invest in UK infrastructure.

“This would provide a long term boost to our economy and would be welcomed by those working in the South West’s beleaguered construction sector.

“Measures to encourage businesses to take on more staff could also provide the incentive they need to expand. The most obvious of these would be a reduction in National Insurance contributions, or perhaps introducing a National Insurance holiday for new employees taken on by businesses.

“Slashing red tape that impedes growth would also be a step in the right direction.

“A key priority must also be to attract foreign investment to these shores. Overseas businesses are amongst the major employers located in Exeter and we need to encourage more to set up home here, and retain those already here.

“In order to achieve this, the UK must be seen to be competitive on the world stage. The Government must safeguard this reputation for being open for business through being very clear about its overall strategy for tax.”

For live updates and reaction to the Budget, visit thisisexeter.co.uk on Wednesday afternoon.