Devon businesses welcome tax breaks in Chancellor’s Autumn Statement
Business leaders in Devon have welcomed some measures announced in the Chancellor’s Autumn Statement but called for better understanding of the burdens on firms.
There was widespread relief that George Osborne has abandoned plans to increase duty on fuel by 3p a litre in January, while unveiling greater tax incentives for firms to invest in new plant and machinery.
In the face of downgraded forecasts for economic growth, other steps aimed at supporting businesses included lowering the main rate of corporation tax by an extra one per cent, to 21 per cent, from April 2014.
Jon Blake, regional director of the Institute of Chartered Accountants in England and Wales (ICAEW), said: “The Chancellor has gone for growth and wants to show that the UK is open for business. The reduction in corporation tax will be welcome news for larger companies and will encourage inward investment.
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“The increase in the annual investment allowance, which ICAEW called for, will be good news for smaller businesses. The Chancellor will hope that the new measures will impress the 67 per cent of ICAEW business members who are not confident that the Government’s Plan A for the economy will deliver growth this Parliament.
“There are still a number of juggernaut policies devised in Treasury by people who do not understand the realities of running businesses. Policies such as the new PAYE reporting system will create additional burdens on business at a time when they should be focusing on growth. Until these policies are made more flexible, deficit reduction will continue to be slow and growth will take longer.”
Mathew Scott, tax director at KPMG Plymouth, said: “Businesses in Devon will welcome the Chancellor’s attempts to keep it simple with very little tinkering to the tax environment and yet several measures to encourage investment in the UK.
“Reducing the corporate tax rate to 21 per cent from April 2014, maintaining business rates relief and a tenfold increase in the annual investment allowance, should encourage capital investment particularly for small and medium sized businesses, and offer some breathing space as the economy continues to struggle.”
He added: “Announcements on extra spending on infrastructure projects will be particularly welcome to businesses in Devon. Measures to boost the construction sector will no doubt help to stimulate growth all the way down the supply chain to the SME community.”