DUNCAN MEREDITH, tax expert for Garbutt & Elliott chartered accountants of York, examines the regional effects of the Budget.

THIS was always likely to be a “tax and not spend Budget” and that will be the painful reality over the next few years, whatever colour of Government we get after the imminent election. In fact, there was an announcement of a change of spending to provide a £2.5 billion package to promote business and invest in key skills.

Businesses in York, North and East Yorkshire are crying out for an easing of the economic and taxation burden within a background of new economic stability.

There was promise of help for small businesses, including an extension of the “time to pay tax” relief (for the whole of the next parliament) and rates relief for small businesses (from October).

The high-speed rail link will be a boon for the region. Also, news of an increase in bank lending must seem like a chink of light at the end of the tunnel. However, the hidden new employment tax rules will impose a new burden of red tape on employers and inward investment is already threatened by the recent attack on non-domiciles.

Road fuel duty is still set to rise (but now phased) – a huge disappointment for hauliers and all transport-related businesses, with tax now well over 80 pence for every litre.

York Science Park will welcome news of encouragement for the digital and biotech industries, promises to promote innovation and confirmation of Government support through a £35 million central Venture Capital fund.

As well as the new taxes aimed at high earners, the increased National Insurance will affect all businesses and jobs, raising billions for the Treasury. Industrial and agricultural buildings allowances are set to disappear, which is a huge disappointment for manufacturers and farmers. Raising stamp duty limits for first-time buyers will be welcome, if only to help kick-start the local housing market. There was promise of extra help for unemployed young people and a boost to the funding for university places in key subjects.

Generally, there were snippets of good news for hard-pressed local people, with working tax credits enhanced and pensioners keeping their higher winter fuel allowances.

With the new high rates of income tax, local business people will look again at the attractive tax breaks for companies and consider incorporation.

There are a number of ideas to be considered, reducing tax costs and, in some cases, making pension provision easier.

As ever, there is much detail to pore over so expect more to come out in the small print. One thing’s for sure: Tax will be even more complicated.