Spring Budget reactions - Stella Amiss

In the Budget Statement the key tax measures were unsurprisingly highlighted under the Chancellor's focus on Enterprise and Employment. 

On Enterprise what we didn’t see was any change to the decision to increase the main Corporation Tax rate to 25%. However the Chancellor did announce what he called a Full Expensing approach for qualifying plant & machinery, for many businesses this is effectively an extension of the Super Deduction in all but name. It’s a clear step to help incentivise investment from business. 

Alongside this we also saw some better news for SMEs with an increase in the amount of R&D relief granted for R&D intensive businesses - whilst a positive step given the reductions made to this relief in the Autumn Statement this improvement still doesn’t get back to the levels of relief previously available. 

When it came to Employment, the biggest surprise was the proposed abolition of the Life Time Allowance charge which totally removes the cap on the amount of pensions savings someone can have. It’s a significant shift in Government policy and will result in a rethink for employees on their approach to pensions savings. 

I should also mention one more E -  the E for ‘Everywhere’. In a moment of deja vu we did hear about 12 new Investment Zones which will provide tax incentives, business rates relief, and potential grants for businesses in targeted sectors. These new zones will raise expectations in the geographies that benefit, however the challenge will be whether the amount of funding will go far enough for long enough. 

Before the budget there was a lot of talk about whether the UK Tax landscape is a competitive one for businesses. Whilst the Chancellor did not announce any big give-aways, he did enough to continue to encourage investment and left himself wiggle room to make more of a difference in next year’s budget.

Read more reactions to the Spring Budget