What does the Budget mean for business?
Managing director at Haines Watts Manchester, David Fort, considers how the Budget will impact UK business
A few days have passed since the Budget announcement was made in the House of Commons, and accountancy firms are beginning to process what some announcements will mean for the future of business.
David Fort, managing director at Haines Watts Manchester, has provided insights into how the Budget could potentially affect the future of UK business industries.
“Overall, Monday’s Budget was good for business owners,” Fort said, “with no nasty surprises coming from the red briefcase. Instead [there were] some reassuring outcomes, such as increased funding for investment.”
Increased funding for investment has become particularly necessary in this uncertain economy businesses are attempting to survive in. The temptation to be overcautious in the face of Brexit has led to the risk of the economy stagnating, as businesses focus less on continual investment and innovation, and more on treading water.
He continued: “The annual capital allowance has increased, and the personal allowance threshold is also rising. In addition, employer contributions for apprenticeships could be halved from 10% to 5% for some companies.”
However, although this may prove to keep businesses operating in the short-term, Fort has said that it “has become apparent through this year’s Budget that there does not seem to be a clear long-term plan for business.”
It was largely predicted by most in the industry that the chancellor would be focused more on the next several months, rather than mapping out the future economy for businesses and the public. However, problems arise when the likes of the annual capital allowance begin to fluctuate dramatically over just a five-year period, “from as low as £200,000, to as high as £1m.”
Fort explained: “For a business investing in capital expenditures to expand and grow, it is important to be able to formulate a plan which looks further than just a year.”
From an accountancy perspective, one of the major problems with short-term solutions and long-term uncertainty is the knock-on effect with clientele, particularly when that clientele involves businesses.
“When advising your clients, you want to be able to give them long-term, reliable recommendations,” Fort added. “But this Budget was slightly frustrating, with what can be viewed as some erratic policy moves. What the UK really needs is a definitive five-year forecast to help them compete in the world market, providing security for the long-term.”
It could be that the Spring Statement (potentially a Spring Budget) will offer more definitive forecasting for the next few years, thus enabling the stabilisation of UK business.