Budget 2014: A mixed bag of responses

Budget 2014: A mixed bag of responses

Budget 2014: A mixed bag of responses

First published in Business news

Business leaders and organisation representatives across York have today been giving more reaction to Chancellor George Osborne's 2014 Budget.

Coun James Alexander, leader of City of York Council, said: “I welcome Government’s investment and measures to improve access to finance to support housing development, particularly for small house builders. These measures are in line with our Get York Building programme in York, aimed at support growth in the housing market and ultimately improving investor confidence in York.

“I’m also pleased to see the extension of Help to Buy scheme up to 2020. Support for first and second time buyers who want to get on, or move up, the housing ladder is something we have been calling for in York for some time, where traditionally higher house prices have meant buyers needing larger deposits than elsewhere.

“We have said time and again that the current housing shortage and lack of jobs for young people are pressing issues facing the city today. The Chancellor is therefore right to announce higher tax threshold to benefit lower paid workers and alongside additional funding for apprenticeships today.

"However, much more could be done to build new homes, create jobs and grow the York economy if we had more powers and resource locally to tackle these issues and invest in new housing and infrastructure.

"I’d like to see the levy raising powers promised to Wales today, extended to Local Authorities in England. The city is working hard with partners to come up with ways of working more effectively in a self-financing way and we need Government to work with us to make this happen.

"Whilst there were no specific Local Authority cuts announced today, this does not remove the fact that we are faced with a further saving of £23m in the next two years which will mean it has made a total of £74million in savings since 2010/11 – over 40% of our current budget.

“We also note with caution the welfare cap that was announced today and will be debated in Parliament next week. Whilst we know that the Government needs to address the deficit, we are now working to understand the implications on York households of the proposed welfare cap”.

Roger Marsh, chairman of the Leeds City Region Enterprise Partnership, which covers the York area, said: "We are delighted that the Government has recognised the hard work and positive impact that manufacturers, particularly in the North, have on the economy and we welcome the £7 billion package to cut energy bills for a sector that is vital to our region.

“I am encouraged that additional funding has been made available to support businesses to export. We will be working with partners on our We Are International campaign to maximise the opportunities this funding will bear for businesses and the economy. Connecting our businesses to their specialised markets is vital to maintain good growth and the £20 million Regional Air Connectivity Fund, to support new routes from Leeds Bradford airport, will support the work we are already doing to enhance the international connectivity of the region. “Following the recent launch of the LEP’s Apprenticeship Challenge with the Duke of York, we are supportive that the government is going even further to support over 100,000 more apprentices across the country. We will continue to work hard and support businesses in the region to enhance their workforce and create career opportunities for our young people.”

Simon Theakston, executive director of T&R Theakston Ltd and chairman of the Yorkshire regional group of the British Beer and Pub Association (BBPA), said: “I’m delighted by the decision to reduce duty for a second year. This is a Chancellor who is clearly listening to us.

“This reduction is a massive boost to our industry and one that will have a positive impact on investment and jobs in the British beer and pub industry in the years to come.

“This decision, made after considerable campaigning from many of our members and supporters, has been received very favourably, and I would like to thank the Chancellor on their behalf.

“I am confident this reduction will see the industry increase its economic contribution, both locally and nationally, and help ensure the long-term success of the British brewing industry and our much-loved pubs and clubs.

“I’d also like to thank our local MPs who have strongly supported our campaign.”

York MP Julian Sturdy praised George Osbourne’s latest Budget announcement, with its measures to help workers, savers, motorists, local charities, pubs and small businesses.

He said “I am delighted both on a local and on national level. Locally, I am thrilled that the campaign to help Yorkshire Air Ambulance with its fuel costs, which I raised in Parliament back in 2012, has now been taken up by the Treasury.

"The Yorkshire Air Ambulance, which saves lives everyday across the county, will benefit from the £325,000 5-year grant to help with the cost of paying VAT on its fuel.

"The roads around Yorkshire, which take a battering every single year, will also benefit from a new funding stream to repair potholes and I urge local councils to make bids for a slice of the £200 million fund.

"Motorists also benefit from the latest fuel duty rise to be scrapped. Petrol is now 20 pence lower per litre than it would have been which is a great help to hard-pressed motorists across Yorkshire.

"The county is renowned across the world for the hospitality of its village pubs and the fine produce of its many small breweries, all of which have will benefit from the Chancellor’s decision to cut the duty on beer for a second year running. I will certainly be having a drink to celebrate the good news”.

Alastair Byrne, tax associate at York accountants JWP Creers, said: "The budget, George Osborne’s penultimate before the next election, did not hold many surprises for business.

"He confirmed the already announced move of the main rate of corporation tax to 21 per cent in April 2014 and the move to 20 per cent the following year, and the £1,000 business rates saving for high street shops and the £2,000 national insurance saving for all businesses.

" It had also been widely rumoured that he would extend the current £250,000 Annual Investment Allowance (“AIA”) period beyond December 31, 2014. He did so extending it for a further year to December 2015, but also doubled its impact. With effect from 1 April 2014 businesses will be able to claim up 100 per cent of their first £500,000 of expenditure on plant and machinery and integral assets.

"He focused on the drive to increase the manufacturing base of the UK economy by offering further incentives to business in the form of an increased amount and cheaper export credit to help finance exports. He also announced smaller measures to make international business travel cheaper by reducing airport duty.

"In addition to the announced extension of AIA, there was a further extension of the Enterprise Zones claim period to 2020. Enterprise zones can claim 100 per cent capital allowances on plant and machinery and were introduced for a five year period to 31 March 2017.

"Business premises Renovation allowances are also provides 100 per cent relief from tax for bringing back into business use qualifying business premises in disadvantaged areas which have been unused for over a year.

"Loss making companies who claim R&D tax credits will now be able to claim an enhanced tax repayment on surrender of losses in return for a corporation tax repayment. Up until now companies surrendering losses a have received 11 per cent of the loss surrendered. This is to be increased to 14.5 per cent with effect from April 1.

"A more interesting measure is a requirement for taxpayers who have sought tax advantages through tax avoidance schemes will find that they are required to pay the tax up front and then seek redress through the courts if they believe they have paid too much tax. This changes the emphasis on tax avoidance to one where the tax payer has to demonstrate that he is innocent before he can benefit. Rather than HMRC having to make all the running."

"Finally not announced in the budget but in the small print it has been announced an extension to the CGT business asset roll-over relief rules for those who dispose of or acquire payment entitlements under the new agricultural subsidy “Basic Payment Scheme”. Payment entitlements under the scheme will fall within the classes of qualifying business assets. "

Paul Widdicombe, head of wealth management firm Brewin Dolphin’s York office said: "Like a phoenix from the flames, Osborne’s policy sees the British pension rise from its deathbed, freed from fears over stealth taxes and over complication.

"This is a total game changer, and will result in the almost immediate death of the annuity – for which we have long called for.

"It is a huge change in the flexibility of the pension system, with lower taxes and higher lump sums.

"We welcome the fact that the government is willing to trust people with their own finances and await clarification on how the vast amount of necessary advice will be delivered.

“The Chancellor has removed the nanny knows best aspect of the ISA – allowing a far broader range of products, and the ability to switch from shares to cash and back again.

"With a massive increase in the amount that can be sheltered in an ISA wrapper, as well as the inclusion of peer to peer lending and shorter dated retail bonds, the ISA is now a far sharper tool in the tax planning toolkit.”

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