This year’s budget is as tricky as ever; balancing the books, increasing tax revenues to help ensure a level of economic buoyancy to take us through Brexit, but at the same time needing to remain competitive in the global economy.
Taking this and the current challenges faced by UK SME business owners into account, Menzies business sector teams have brought together a list of predictions and issues that they’d like the Chancellor to address in the upcoming Autumn Budget 2018 in order to encourage positive growth and long-term economic stability.
Business Services Sector
A key area for the legal sector is to allow them to continue operating with a flexible approach to recruiting talent and opportunity spotting in these uncertain times.
Law firms will not want to see a further attack on the self-employed and wanting everybody to be on the payroll. As this does not aid businesses identifying short term opportunities that need a particular skill set to assist the projects.
The sector continues to be impacted by the potential relocation of some of its big names, bank and other financial providers included. The Chancellor should look to encourage the big players to stay, though there is little he can do from a tax saving point of view. Understandably the public’s appetite for tax breaks on big business is approximately zero.
Click to expand our Finance sector budget focus points
The upcoming Budget could be a mixed bag for manufacturers. Predictions indicate some good news not least due to the Government’s signals to end austerity, and measures to help Britain stay open for business. Although this good news may be dampened by increased compliance requirements and other potential tax pitfalls, it’s certainly one to watch.
Click to open our 5 Manufacturing Predictions
Overall the message for this budget has to be one of stability and consistency within policies (as reflected in the now almost essential fuel duty freeze!) which aims to keep the UK competitive, driving forward business and the people behind those businesses.
Property & Construction Sector
It would be good to see policies that aid and encourage activity in the market and make housing more affordable. However there is currently a shortage of housing and properties are unaffordable for many in the market.
The proposed increase in SDLT for foreign buyers is meant to go towards helping homeless people rather than increasing the government’s coffers.
As a general point it has previously been announced that the CT rate will fall to 17% in April 2020.
We would like to see the Government lend a hand to retail businesses as the conditions are not easy out there, with all the uncertainty a little glimmer of hope with some positive news would really boost confidence in the sector.
Hospitality & Leisure Sector
The Hospitality and Leisure sector is dependent upon overseas workers and would benefit greatly from tax policies that would allow employees the ease to move between countries with minimal red tape. Therefore any legislation that could hinder the free movement of workers would have a massive impact on businesses in the sector.
The sector has lobbied for years the reduction of VAT as rates in the UK are one of the highest in Europe. Although this has not been predicted, a review of the situation would be welcome by most businesses in the sector.
Transport & Logistics Sector
The transport and logistics sector is under serious pressure from low margins, environmental legislations, new technology and staff shortages. Combining the uncertainty of Brexit and the possible outcomes of a no-deal scenario, we call for the Chancellor to consider the following to avoid the UK’s supply chains grinding to a halt leaving people with rows of empty shelves in the shops.
Click to open our 3 Transport & Logistics budget focuses
With any measure of encouraging investment in UK businesses welcomed, the proposal for tax relief for IFAs and fund structures for knowledge intensive companies are minor changes in this regard. Although as a wider point we feel tax relief for investment in small businesses in general is good (EIS/SEIS). In addition we would like to see a detailed plan for encouraging investment in medium size technology businesses, this will allow them to grow and remain independent, and then maybe one day the UK could produce its own Amazon or Google.
Any alterations to the off payroll working rules is likely to create uncertainty in the sector, due to dynamic companies using flexible labour outside of traditional structures then being hindered.
For the large corporates it has been rumoured that the UK may produce its own digital tax for multinationals. Although we would encourage the government to produce a coherent plan with the OECD thus ensuring we do not end with a fragmented tax system, with a number of sets of rules.
Overall, the message for this budget has to be one of stable and consistent policy which aims to keep the UK competitive, driving forward business and the people behind those businesses. If you’d like to discuss how your business can mitigate against business risks and plan for future profitability, then please contact Menzies directly.