Business groups have broadly welcomed the measures announced by George Osborne in his Budget speech, including cuts to corporation tax and the long-awaited review of business rates.
John Longworth, director general of the British Chambers of Commerce (BCC), said: “Once again, it appears that the chancellor has pulled off a difficult balancing act, maintaining fiscal discipline while ensuring that necessary deficit reduction doesn’t undermine the UK’s growth prospects.”
Osborne’s focus on “fiscal responsibility” will “play well with business audiences,” he said. “Lower business taxes, allowances for investment, and targeted support for sectors, regions and small companies all contribute to confidence, investment and job creation.”
John Cridland, CBI director-general, agreed: “Stability and consistency are what businesses need to grow and prosper. This Budget sets the tone, providing a clear plan for fiscal health and growth.”
He added: “The reduction of the headline rate of corporation tax to 20% next month is a meaningful step in making the UK the most competitive tax regime in the G20 and will help to attract investment.”
The proposed review of business rates is “long overdue”, said John Allan, national chairman of the Federation of Small Businesses (FSB). “Our members will be encouraged by many of today’s announcements. His commitment to raise the Annual Investment Allowance to an appropriate level will provide the certainty needed for businesses to plan and invest – something badly needed if the UK is to raise its productivity.”
Allan praised the introduction of a digital tax account. “This is something we have long advocated. Implemented properly, this should reduce the time businesses take to complete their tax returns.”
He added: “While we wait to see the details, the decision to abolish class 2 NICS for the self- employed is in principle a welcome step towards simplification and should boost take-home pay for the self-employed on the lowest incomes.”
Phil Orford, chief executive at the Forum of Private Business (FPB) said the budget went some way to improve fairness for small firms. He said: “Over three-quarters of our members (78%) feel that there is a danger that HMRC could unfairly focus on small to medium-sized firms instead of tackling large corporate tax avoidance. The chancellor’s measures to tighten up the rules and close existing loopholes are positive steps towards creating a fairer system where larger businesses are seen to pay their fair share of taxes.”