The Spring Budget delivered by chancellor Philip Hammond was “not a nice Budget for SMEs”, according to Tim Davies, UK head of tax at Mazars.
Davies said that despite Hammond’s pledge to make the UK “the best place in the world to start and grow a business”, increases to national insurance contributions and the reduction in the dividend tax free allowance will result in additional tax burden for entrepreneurs and the self-employed.
In addition, the Budget’s tax changes were “not in line with the priorities of small business,” said Moore Stephens, following a pre-Budget survey that identified income tax reduction as the top priority for businesses.
“The tax changes announced in the Budget do not match what businesses wanted to see,” said Timothy Fussell, partner at the firm.
A ‘mixed bag’ for SMEs
ICAS said that the Budget was a “mixed bag” for small business, but backed the chancellor’s decision to delay the introduction of Making Tax Digital for business with turnover below the VAT threshold.
“ICAS supports the overall objectives of Making Tax Digital, but has long been concerned with the unrealistic timescale for the project. This shows a chancellor who has listened,” said Anton Colella, chief executive of ICAS.
Prioritising big business
While welcoming the move to drive awareness of R&D tax credit incentives, Jenny Tragner, director at R&D tax credit consultancy ForrestBrown, and member of HMRC’s R&D consultative committee, said that previous measures to drive awareness had “not been fit for purpose.”
Tragner also highlighted inconsistencies in the chancellor’s message. “The government’s message also seems to be contradictory. The Spring Budget appears to prioritise the needs of big business over those of SMEs and start-ups, yet the chancellor stated it is the government’s ambition for the UK to be the best place to start and grow a business,” she said.
No news on Small Business Commissioner
Dafydd Llewellyn, managing director of Concur, said that commitment to helping small businesses with business rates rises was “vital”, as SMEs make up 99% of the private sector.
Yet the lack of news about the appointment of the Small Business Commissioner caused disappointment.
“I was disappointed however, not to get a further update on the appointment of the Small Business Commissioner,” said Llewellyn.
“We’ve heard this position will be filled later this year, but who are the government interviewing? It would also have been good to have been provided with further details on the powers they will have, particularly when it comes to tackling the late payment epidemic that is crippling millions of organisations – an issue that should have been addressed as a stand-alone item in this Budget,” he added.
This article was previously posted on Accountancy Age