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News // 21/11/2016

Autumn Statement 2016 Predictions

Menzies Autumn statement 2016 response

Entrepreneurs and small and medium-sized businesses need tax changes that provide continuity and encourage long-term planning and investment.

In the current climate of Brexit uncertainty and currency fluctuations, SMEs need certainty and continuity above all else from this year’s Autumn Statement.

In particular, Chancellor Philip Hammond has an opportunity to introduce fiscal measures to incentivise international corporate investment in the UK, while also encouraging home-grown businesses to invest in capital, innovation, skills and business growth.

Stephen Hemmings, Menzies corporate tax partner provides some forward thinking analysis of what Chancellor Philip Hammond may focus his attentions.


THE UK-BASED AND INCOMING SME FOCUS

Stephen Hemmings - Menzies AccountantThe Chancellor has an opportunity to launch a far-reaching investment manifesto for the UK, backed up by tax legislation that will attract multinationals and boost the thriving tech sector. This manifesto needs to encompass core areas such as incentivising R&D, attracting inward investment and encouraging investment in training and skills development.

SMEs will be hoping that the Chancellor announces changes that are designed to boost business confidence, perhaps by cutting VAT, which would encourage consumer spending. While this would have a positive effect on demand in the short term, it is unlikely to be beneficial in the longer term.

Further reductions in the headline rate of Corporation Tax are unlikely. However, it is possible that the Chancellor might opt to grease the economy by cutting VAT for a temporary period. This could be beneficial in the short-term but could have an inflationary effect, encourage imports and increase the balance of payments deficit. This could be counterproductive in the longer term.

We would prefer the Chancellor to concentrate on scoping out a more long-term vision for the UK tax system that takes into account Brexit.

The measures that would provide most support for UK-based and incoming SMEs include:





UK Business Sector Predictions

Here follows a summary of predictions from each of Menzies Business Sector Teams about the forthcoming Autumn Statement:

Hospitality & leisure

Dave Gosling - Menzies AccountantWhen it comes to this years Autumn Statement, the Hospitality & Leisure sectors would like to see the Chancellor focus is on four key areas:

1 – A reduction in VAT.
2 – Reform of business rates.
3 – Thought over national living wage and impact on businesses.
4 – Incentives for training/developing staff in light of Brexit concern over free movement of staff and to address staffing shortage in sector.

Find out more about the Menzies Hospitality & leisure sector services.

Get more input on the 2016 Autumn Statement implications for the Hospitality & leisure sector by speaking to our sector team.


SME manufacturers need continuity and a long-term plan to boost investment.

Caroline Milton - Menzies AccountantSmall and medium-sized manufacturers need tax changes that provide continuity and encourage long-term planning and investment.

In the current climate of Brexit uncertainty and currency fluctuations, UK-based manufacturers need certainty and support above all else from this year’s Autumn Statement.

In particular, Chancellor Philip Hammond has an opportunity to introduce fiscal measures to incentivise international corporate investment in the UK, while also encouraging home-grown businesses to invest in capital, innovation, skills and business growth.

Read our Manufacturing sector teams in-depth Autumn Statement predictions.

Find out more about the Menzies Manufacturing sector services.

Get more input on the 2016 Autumn Statement implications for the Manufacturing sector by speaking to our sector team.


Chancellor must relax the fiscal stranglehold on property developers.

Rebecca Wilkinson - Menzies AccountantProperty developers across Britain will be hoping that as someone who has previously held an interest in a property development business (Castlemead Homes), Chancellor Philip Hammond will take steps to relax the fiscal stranglehold on the sector.

The Chancellor has already hinted that he plans to create a £3bn Home Building Fund to help small businesses build around 25,000 new homes by 2020, with up to 225,000 homes planned for the longer term. If reports are right, a further £2bn will be set aside for house building on surplus public sector land and encouraging the use of modern building techniques.

Read our Property sector teams in-depth Autumn Statement predictions.

Find out more about the Menzies Property & construction business services.

Get more input on the 2016 Autumn Statement implications for the Property & construction sector by speaking to our sector team.


SME retailers need some well-considered incentives to boost confidence and alleviate cost pressures.

Martin Hamilton - Menzies AccoutantsIn the current climate of Brexit uncertainty and currency fluctuations, UK-based retailers need some well-considered incentives to alleviate current cost pressures and encourage long-term planning.

Just one year ago, retailers were hiring at their fastest rate for a decade and there was healthy growth in the sector. Auto enrolment and the National Living Wage have brought some challenges but these should have been manageable were it not for the outcome of the EU referendum in June, which has created considerable uncertainty. The Chancellor must address this in a practical and direct way.

Read our Retail sector teams in-depth Autumn Statement predictions.

Find out more about the Menzies Retail & wholesale business services.

Get more input on the 2016 Autumn Statement implications for the Retail & wholesale sector by speaking to our sector team.


Technology firms need a clear post-Brexit strategy.

Anthony Lalsing - Menzies AccountantIt is important the government have a clear post BREXIT strategy for the technology sector and negotiates continued access to the single market which is key in generating jobs, foreign investments and attracting talent to the UK.

Other areas of interest include employee incentives and funding.

Read our Technology sector teams in-depth Autumn Statement predictions.

Find out more about the Menzies Technology business services.

Get more input on the 2016 Autumn Statement implications for the Technology sector team.


Chancellor must find a way to address the driver shortage.

Andrew Cook - Menzies AccountantIn his Autumn Statement, Chancellor Philip Hammond must find a way to address current driver shortages and offset the expected post-Brexit industry crisis.

There is an estimated shortage of 60,000 drivers currently as the average age of lorry drivers nears 50 and about one in four drivers is set to retire in the next decade. If access to low-cost EU workers is restricted in the future, this position could worsen considerably.

Business owners in the transport and logistics sector are hoping that the Chancellor has recognised the serious impact that driver shortages could have on UK industry; potentially impacting on productivity and economic prosperity.

He should consider enhancing measures that encourage apprenticeships in the sector and make additional government funding available for vocational training schemes that are designed to give SMEs access to the labour supply they need.

Read our Transport and Logistics sector teams in-depth Autumn Statement predictions.

Find out more about the Menzies Transport & logistics business services.

Get more input on the 2016 Autumn Statement implications for the Transport & logistics sector by speaking to our sector team.


For more information about Menzies LLP or to talk to us about the impact of the 2016 Autumn Statement on your business and finances, contact your Menzies Relationship Partner or contact Menzies.

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