The Budget 2014 predictions: UK business leaders join the debate
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To see what existing policy business leaders like or want to see changed, and discover what new legislation is desirable, GrowthBusiness provides its annual pre-Budget round-up.
On 19 March chancellor George Osborne will give his fifth Budget speech on the back of a solid year for economic growth in the UK.
Business leaders throughout the country have now lived through four years of 'austerity Britain', but a renewed government focus on how growth companies can impact the nation as a whole.
Summary of the Budget 2013:
- Corporation tax cut to be accelerated
- National Insurance boost for SMEs
- Stamp duty tax on AIM shares eliminated
- Investors in SEIS secure extension to capital gains tax relief
In the lead up to the Budget 2014, we've asked 15 entrepreneurs and business leaders what they are hoping to see announced.
Rob Symes, CEO and co-founder of The Outside View, says:
'I would like to see a low and fair tax environment that removes negotiations with staff and director's on what kind of contracts work best when they join a start-up.
'Lowering employers and employees NI for those who join companies under 2 years from registration would also help alongside an extension of SEIS tax relief envelope.'
Stephen Archer, director of Spring Partnerships, says:
'This budget needs to be, and will be, crucial as it will set the scene for the run up to the election in 2015. Incentives for business and entrepreneurs is critical, though I fear too much will be given to the consumer to help them feel better.
'Late payments to small firms remain an issue and one that larger firms continue to ignore. The government needs to tighten penalties and ease of achieving redress against the perpetrators, e.g. through tax penalties. The EU late payment directive of 30-day payment terms needs to be mandatory.'
'An integral part of economic policy is to increase exports. BIS/UKTI has received increased financial support in recent years and is implementing very positive initiatives, but there is much more that could be done to assist exporters.
'From a Chinese digital marketing perspective, it is easy to see the UK is absent in China in not having any generic business promotional presence. Other countries such as France, Germany and Italy run effective campaign strategies to promote their country's exports, but the UK is invisible.
'The support provided for would-be exporters could also be improved. Some useful grants are available, but they are often narrowly defined, such as financial assistance for overseas promotion at exhibitions, but not at conferences.'
Peter O’Toole, CEO of Retail Merchandising Services, says:
'The retail sector would value an extension of the 2 per cent cap on business rates in England and Wales. This measure will give confidence to store-owners and help protect thousands of jobs, providing a much-needed boost to local high streets.
'I would also welcome the extended reduction of business rates for small businesses. With nearly 150,000 small, independent retailers in the UK, this support would be invaluable in helping them to grow and invest. The government must also continue its reoccupation relief for new occupants of previously empty retail premises, as retailers continue to battle the rise of online shopping.'
Matt Jones, founder of Studio Tri and S3, says:
'While 80,000 large businesses gain from corporation tax reductions under the coalition government, 1.5 million smaller companies have not benefited. I would urge the chancellor to bring forward corporation tax cuts by a year to April 2014, to reassure small business owners, and support growth.'
'Ultimately, small businesses will create the jobs of the future. I would echo the CBI’s call for the government to boost access to finance. After all, it is crucial for companies to grow.'
Jerry Brand, managing director at Caternet, says:
'I want to see people on the doll working on refurbishing the infrastructure of this country. We pay people benefits because they can’t get a job, but we have so many potholes in the roads now and of course the flooding damage and we need housing.
'So teach these people some trades and get them working on the country (pay them for it and save the benefits).'
- Budget 2013: Kay points for entrepreneurs and business builders
- Budget 2012: Impact on British businesses
- Budget 2011: 'Mixed bag' on support for growth businesses
Sassi Holford, founder of Sassi Holford, says:
'I would like to see tax breaks for child care costs for working women, and as someone who champions local craft skills and endeavours to always manufacture in the UK, more government incentives to support and retain manufacturing in the UK.'
Philippe Gelis, CEO at Kantox, says:
'No doubt this Budget review will once again include claims of supporting small business owners by forcing banks to increase their lending. However, even if figures reveal that banks are finally being badgered into providing finance to SMEs, banks are simply giving with one hand and taking with the other.
'Banks are clawing back finance by imposing shocking foreign exchange rates on small businesses and this is preventing small players from realising their global potential.'
'The government has set ambitious targets for exports by 2020, but currently SMEs are deterred by the ludicrous banks fees involved with making customer and supplier transactions overseas. More support is needed to boost competition in the foreign exchange industry and force banks to drive down unfair rates for small businesses.'
Darren Fell, founder of Crunch Accounting, says:
'Access to capital is the biggest problem for entrepreneurs - HMRC could offer, for example, a rebate of three months of PAYE tax contributions from their full-time employment to those who start their own business. This would get the cash to start-ups when they need it most - right at the start of their business.'
Graham Ewart, MD of Direct Healthcare Services, says:
'Any moves to extend the 2 per cent business rate cap will provide reassurance for manufacturers, as it's a fixed cost regardless of trading conditions. Extending the reduction of business rates will allow us to re-invest in growing our businesses and sustain job creation efforts in manufacturing, a sector which is crucial to the economic recovery.
'We see great value in expanding into different markets, and feel British manufacturing companies will benefit from tailored support, particularly in export. Disappointingly, the latest UKTI figures show that the number of export intensive firms have fallen in recent years. Although the chancellor has freed up an extra £50 billion of export finance, I am hoping measures and incentives will be put in place to boost exports, as this would help us achieve sustained growth.'
'If export is not high on the agenda, then we risk missing out on a key opportunity to really drive growth back into the economy.'
Richard Acreman, CEO of WM360, says:
'I hope George Osborne continues the good work of bringing corporation tax to the 20 per cent mark, encouraging companies to stay in the UK and build up the thriving business communities we’re already seeing around places like Shoreditch and King’s Cross.
'I'd also like to see support schemes that encourage and reward innovation. UK companies, and particularly small technology firms, have demonstrated a creativity and flair which will go a long way towards making this country a global leader in research and development. Too many companies are currently being tempted away to places like Silicon Valley by financially supportive foreign legislation.'
'Lastly, I'd suggest putting more substance behind the Prompt Payments Code to encourage larger businesses to pay their suppliers on time. It was recently revealed that companies in the UK owe their suppliers £55 billion; this is money which funds not only growth, but innovation.'
John Ritchie, CEO of Ellipse, says:
'If companies provide pensions, which effectively protect people’s incomes after retirement, the government recognises the social benefit – as well as the easing of pressure on their own benefits system – by applying a lower rate of National Insurance contributions.
'It would be nice if an equivalent reduction in the rate of NI was introduced for companies that protect their employees’ income before retirement, which many do by effecting income protection policies, which will pay benefits for employees who are long-term sick, which in turn reduces the burden on the state.'
Lawrence Mallinson, MD at James White Drinks, says:
'I would like to see a more level playing field for taxation and a more honest reporting of it. I do not understand why lawyers, accountants and bankers working for limited liability businesses should enjoy a more favourable tax regime – by purporting to be self-employed “partners” – than all other employees.
'By doing this they do not pay full national insurance dues. I also think national insurance should be merged with income tax so the claim that the top rate of tax is 45 per cent is exposed for the lie that it is.
'By the time all national insurance is included the rate is over 60 per cent. And finally the taxation system should be made much simpler – there are too many stupid exemptions that are exploited and which cause the honest taxpayer a great deal of confusion and rewards the artful dodger.'
Fran Brosan, co-founder of Omobono, says:
'According to government figures from SME Business Barometer, UK SMEs have recovered well post-recession and are expected to turn a profit. With nearly half of UK SMEs launching or innovating a product in the past year, their expectation of profit will make room for more innovations and partnership opportunities.
'Since the UK is seen as a centre of excellence for creativity and digital skills (of course we could outsource back-end coding to the Far East) but the people at the forefront are here in the UK, therefore we would like to see coming out of the Budget entrepreneur’s relief – allowing business owners (which is the majority of the UK’s 4.9m SMEs) to take money out of their businesses at lower tax rates, to encourage more people to start businesses and perhaps encourage others to reinvest.
'Another recommendation would be entirely tax deductible child care because women in the workplace are critical to the success of business.'
Askar Sheibani, CEO of Comtek, says:
'The chancellor urgently needs to address the current business rates system, which is a completely unmerited way of taxing companies. It takes no account of the success or maturity of the business and is far in excess of that levied in other European countries.
'As a UK business with operations both here and in the Netherlands, we currently pay thirty times more for our UK business rates than we do abroad, even though the properties are a similar size. Taxes such as these mean less investment in revenue generating activities and ultimately thwart Britain’s ability to compete internationally.
'While the government has taken steps to lower business rates for some organisations, such as those adhering to specific criteria and located in Enterprise Zones, it must overhaul the entire process. More focus should be on profitability and performance, so as to encourage, rather than hamper, business growth.'